U.S. Helps Eliminate China’s Trade Deficit


Chinese officials were worried when China ran a trade deficit in February. The $31.48 billion imbalance was the first time China had run a monthly trade deficit since 1989. Thankfully for the Chinese, U.S. consumers picked up the slack and moved China’s balance of trade back to positive last month. China’s consumers have not been so kind to the United States; we were promised a growing market and a fair trading partner for U.S. goods, but the relationship has proven to be incredibly lopsided. China’s cheap labor and lax regulations have put American companies out of business, while American dollars have flown into Chinese hands. This is clearly an unsustainable relationship.

After its trade deficit in February, China’s economic fate took a turn for the better with a $5.35 billion surplus in March. Unfortunately when China’s trade balance is positive it is generally a bad sign for the United States. China’s exports in March were up 8.9 percent from last year.  Many of these imports were destined for American shores, where increased consumer confidence has led Americans to begin buying foreign made goods again. Americans rarely intentionally seek out imported goods, but American manufacturing is in such a state of decline that, in many cases, imports are all that are left. Attempting to buy American-made electronics is an exercise in futility.

The other problem with this situation is that while we buy Chinese goods in massive amounts, China has never developed a legitimate marketplace for American goods. America exported only $103 billion worth of goods to China last year, leaving the trade gap between our two countries at $295 billion. When China joined the WTO in 2001, analysts said that the country would become a major market for American goods as it grew. More than a decade later those same analysts are heralding China’s growth and status as a global economic power, but American goods still have little foothold in the Chinese economy.

Our trade deficit is slowly killing our economy. Every dollar we spend on overseas goods is a dollar that could have been reinvested here in the United States. Our trade agreements, particularly our membership in the WTO, have left our economy vulnerable. American consumers spending money should be a good thing for our economy, but instead of helping the United States we are helping China to avoid another month of trade deficits. We need to have trading relationships that work for the United States, and free trade under the WTO has been quite the opposite.

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