The US has long capitalized on its position as the world’s biggest economic power and largest trader to ensure that trade deals serve its interests. Now, with the US abandoning free trade, China can take up the mantle of promoting it, thereby improving its image and demonstrating its commitment to global governance and development.
BEIJING – Until the 1970s, the United States’ foreign trade was largely balanced. Beginning in the middle of that decade, however, the trade surplus for services increased significantly, while the deficit for goods started to expand. This imbalance has become a key concern in American political and economic circles. President Donald Trump argues that the widening US external deficit reflects unfair international rules that benefit its trade partners, with China receiving the most attention.
To understand the current China-US trade relationship, two points should be considered. First, until 1985, China had a trade deficit with the US. Then the imbalance shifted, and China registered a $60 million trade surplus with the US, which accounted for 0.3% of the total US external deficit. In 2016, however, the US trade deficit with China amounted to $347 billion, accounting for 44% of its total deficit. Second, the size of other countries’ surplus with the US has not increased much. Japan’s trade surplus with the US was $103 billion in 1985; by 2007, it had increased to only $130 billion.
BEIJING – Until the 1970s, the United States’ foreign trade was largely balanced. Beginning in the middle of that decade, however, the trade surplus for services increased significantly, while the deficit for goods started to expand. This imbalance has become a key concern in American political and economic circles. President Donald Trump argues that the widening US external deficit reflects unfair international rules that benefit its trade partners, with China receiving the most attention.
To understand the current China-US trade relationship, two points should be considered. First, until 1985, China had a trade deficit with the US. Then the imbalance shifted, and China registered a $60 million trade surplus with the US, which accounted for 0.3% of the total US external deficit. In 2016, however, the US trade deficit with China amounted to $347 billion, accounting for 44% of its total deficit. Second, the size of other countries’ surplus with the US has not increased much. Japan’s trade surplus with the US was $103 billion in 1985; by 2007, it had increased to only $130 billion.