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U.S. trade deficit problem – “one word: China”

The U.S. Department of Commerce reported on April’s international trade in goods and services and brought a quick response from the Alliance for American Manufacturing.

“Our trade problem can be summarized in one word: China,” said AAM Executive Director Scott Paul. “Imbalanced trade with China is responsible for over half (57%) of the overall U.S. trade deficit in April.”

Paul added: “China’s mercantilism is the most dangerous threat to real recovery for American manufacturing.  Congress and the Administration should vigorously enforce our trade laws to guard against dumping and subsidies. The exchange rate of the yuan must be on the table at all future U.S.-China economic and trade meetings.

“Until the exchange rate in China is adjusted to reflect market conditions,” Paul said, “we’ll never have balanced trade that benefits American workers and businesses.”

Do you agree? Disagree? Comment now.

Posted in Appliance, Economy, Government, international.

13 Responses

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  1. Steven Capozzola says

    Mr. Paul is right. China is probably the most protectionist nation on earth.

  2. Anonymous says

    I don’t worry about our capablities. We can hold our own with any country in the world as far as our ability to produce quality products and produce them quickly, but we can’t compete with the wages. Mr. Paul hits the nail on the head as far as the embalance in exchange rates vs market conditions. If it is played out on a more level field we will hold our on, until then we are benched for the majority of the game.

  3. John Blundy says

    Until the American people can come together and outnumber by thier votes the influence the Multi-Nationals have over our elected officials, our Government will continue on the current path of allowing the out-sourcing of USA manufacturing jobs, and not enforce WTO rules which China is now violating.

  4. Harry(eng), Henry(fr), Henrich(ge), Enriqe(sp) says

    To blame China is to bark at the wrong tree. Years ago China received the status of prefference to trade in the USA. The multynational companies, where able to make the opening two muves in the chese game, rub their hands for the market size and the big pull of chip and good labor, not putting in the treaty some stops and checks. They couldn’t see the moves farther down in the game. The very large and hungry population able to endure the comunist supresion, with good work etics, smart
    and laborious. China is suffering, too. They manage to bring anly single digit percent from the population to better jobs and out of starvation. With the Golden Guss, aka USA in slow down and contraction from $13 trilion GDP to whatever will be now, they will have to look invard, and grow a domestic market. Let see if we can get our currency back helping in this process.
    This are my thoughts, for better or for worst.

  5. Ames Tiedeman says

    The United States of America has not had a trade surplus since 1975. We have not had a trade surplus with Japan since April, 1976. Every year since 1983 we have been in deficit with Europe. The last time America had a trade surplus with both Russia and China was a very brief period during the Cold War. We have been running ever increasing trade deficits with South Korea since 1998. Our 1993 trade surplus with Mexico is now a 100 billion a year trade deficit. In the 1970’s, 80’s, and much of the 1990’s our trade deficit was never more than one half of 1% of GDP. We now find ourselves with a trade deficit of between 5% and 7% of GDP depending on how you count. From 2002 to 2007 the trade deficit exploded. The only reason unemployment stayed well under 6% is because of the credit bubble. 63% of all jobs created from 2000 to 2006 were housing or credit bubble related. We did not feel the destructive affects of the trade deficit because of this credit bubble. I have concluded from work I have been doing that America will never get unemployment even under 7% with a trade deficit of over 3% of GDP, without a major credit bubble. The U.S. Economy has actually stopped functioning like a real economy. We literally need a credit bubble to function. America must move from the ideology of free trade to the economic policy of balanced trade. Until this structural shift takes place you can bank on the American economy being the laughing stock of the world economy.

    Ames F. Tiedeman
    Dripping Springs, Texas

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Continuing the Discussion

  1. Manufacture This » Blog Archive » It all comes down to China linked to this post on June 11, 2009

    [...] In a blog item on ‘Appliance Talk,’ they homed in on the truth of the matter, quoting Scott Paul again: ““Until the exchange rate in China is adjusted to reflect market conditions, we’ll never have balanced trade that benefits American workers and businesses.” [...]

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