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Reasons behind US trade deficits with other countries [Copy link] 中文

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Post time 2018-5-31 10:40:20 |Display all floors
Anyone who reads the article entitled "The Export Control Risks of US-China Technology Collaboration" by Jian Bin (Ben) Gao and David Hardin at chinabusinessreviewdotcom will realise that America's trade deficits with other countries are of its own making.  As US-China trade expands to higher value goods and services, Chinese companies should carefully assess how US export control laws may affect their activities.

Under such strict controls, Chinese companies can never buy what they really want to buy.  US export controls pose a lot of risks and pitfalls for Chinese companies (taking the example of ZTE).  Chinese firms would end up like the guy in my Political Satire: The Old Man of the Mountain (3), buying just a table top instead of a table with four legs.

The US can never solve its trade deficit problem by forcing China and other countries to buy a lot of agricultural products, commercial aircraft and other unwanted goods.  Agricultural products are perishable goods, and they rot fast.  With insufficient demand, the expensive goods would end up mostly in the garbage dump.  Worse, if they are sold or donated to countries that are facing starvation or famine due to US sanctions, the companies would be punished by the US authorities without any mercy.

The US can address its trade deficit problem with all countries almost immediately by taking the following measures:

1.  Remove all export controls and trade restrictions on all US goods so that they can be sold whenever and wherever they are most in demand.

2.  Let the law of supply and demand play its full role in determining the fairness of world trade on a reciprocal basis.   If there is a demand for any US goods, the US must sell as much as possible to all buyers.  Don't restrict!

3.  Stop using trade sanctions as a"bloodless" weapon of war.  Itis akin to the suicidal act of driving a sword into one's stomach to kill anenemy behind one's back.

Failure to take the above measures to remove the trade restrictions of its own making will mean that the US will always have trade deficit problems with other countries.  Seen in this light, a full-fledged trade war between the US and other countries is inevitable.

Taking the line in the 1966 epic Spaghetti Western film directed by Sergio Leone, “The Good, the Bad and the Ugly”: "If you want to shoot, shoot! Don’t talk", why the US is hesitating all the while in pulling the trigger for a full-fledged trade war?  Contrary to its claims, the US knows for certain that it can never win a full-fledged trade war.

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