Will the US Declare Economic War on China?

[Valmy]

Don't bite the hand of your creditor...

Likewise taking down your biggest customers is a rather bad business decision.

[Alcibiades]

The US trade deficit exists far more because of oil than because of China.

Source?

Countries Contributing the Most to U.S. Trade Deficit
The list below shows America's deficit amounts for its top 15 trading partners.

China ... US$259.1 billion (up 11.4% from 2006, up 59.9% from 2004)
Japan ... $83.1 billion (down 6.1%, up 10.5%)
Mexico ... $74 billion (up 15.4%, up 64.4%)
Canada ... $65 billion (down 10.7%, down 1%)
Germany ... $44.5 billion (down 6.9%, down 2.8%)
Nigeria ... $28.9 billion (up 12.5%, up 97.3%)
Venezuela ... $28.4 billion (up 0.6%, up 40.4%)
Saudi Arabia ... $24.5 billion (up 1.8%, up 57.3%)
Ireland ... $21.6 billion (up 7.5%, up 12.5%)
Italy ... $20.9 billion (up 3.7%, up 20.4%)
Malaysia ... $20.8 billion (down 13.2%, up 20.4%)
France ... $14.5 billion (up 12.5%, down 36.9%)
South Korea ... $13.6 billion (up 2.5%, down 31.5%)
Taiwan ... $12.7 billion (down 16.7%, down 1.9%)
United Kingdom ... $6.7 billion (down 16.8%, down 36%).
Top Chinese exports to America are computers, accessories, parts and miscellaneous household goods. Japan's leading exports to the U.S. are passenger cars.



Read more at Suite101: US Global Trade Debt by Country: 2007 American Deficit Statistics for Top Import & Export Partners http://import-export.suite101.com/article.cfm/us_global_trade_debt_by_country#ixzz0jZU19AsL

http://import-export.suite101.com/article.cfm/us_global_trade_debt_by_country

[Tamas]

Considering how each country's success ultimately depends on the success of the other at this juncture this looks like a lose-lose proposition to me.

The seemingly unbreakable interconnection of China (the contender) and the USA (the reigning champion) is one of the best arguments for globalism and free trade ever made. Almost as good a lock this is as MAD was

[DisturbedPervert]

http://en.wikipedia.org/wiki/Foreign_trade_of_the_United_States

List of countries the US has a significant surplus with is pretty small.  Biggest is Netherlands with the US having almost a 20 billion surplus in 2008, followed by Hong Kong with 15. 

[DGuller]

The US trade deficit exists far more because of oil than because of China.

Source?

Countries Contributing the Most to U.S. Trade Deficit
The list below shows America's deficit amounts for its top 15 trading partners.

China ... US$259.1 billion (up 11.4% from 2006, up 59.9% from 2004)
Japan ... $83.1 billion (down 6.1%, up 10.5%)
Mexico ... $74 billion (up 15.4%, up 64.4%)
Canada ... $65 billion (down 10.7%, down 1%)
Germany ... $44.5 billion (down 6.9%, down 2.8%)
Nigeria ... $28.9 billion (up 12.5%, up 97.3%)
Venezuela ... $28.4 billion (up 0.6%, up 40.4%)
Saudi Arabia ... $24.5 billion (up 1.8%, up 57.3%)
Ireland ... $21.6 billion (up 7.5%, up 12.5%)
Italy ... $20.9 billion (up 3.7%, up 20.4%)
Malaysia ... $20.8 billion (down 13.2%, up 20.4%)
France ... $14.5 billion (up 12.5%, down 36.9%)
South Korea ... $13.6 billion (up 2.5%, down 31.5%)
Taiwan ... $12.7 billion (down 16.7%, down 1.9%)
United Kingdom ... $6.7 billion (down 16.8%, down 36%).
Top Chinese exports to America are computers, accessories, parts and miscellaneous household goods. Japan's leading exports to the U.S. are passenger cars.



Read more at Suite101: US Global Trade Debt by Country: 2007 American Deficit Statistics for Top Import & Export Partners http://import-export.suite101.com/article.cfm/us_global_trade_debt_by_country#ixzz0jZU19AsL

http://import-export.suite101.com/article.cfm/us_global_trade_debt_by_country

And anyway, the real world international trade is not quite what it's like in Victoria.  Even if there is a resource that you got to import, it doesn't have to result in your country being a net importer.  In a floating exchange rate system, the value of the currency changes automatically to counter-act the net trade deficits or surpluses.  Of course, floating exchange mechanism is short-circuited when countries peg their currency to the dollar.

[The Brain]

Why economic war?

[alfred russel]

I propose a thumb war.

[grumbler]

Source?

Common sense.  The US imports more than $13 million barrels of oil per day.  At even as low as $60/barrel, that's $780 million a day, or about $285 billion a year.  At $80 a barrel (more like the price over the last year) it would be $380 billion a year.

(snip)

Your charts showing trade deficits per country shows nothing about why the deficits exist (oil or otherwise).

[grumbler]

Countries Contributing the Most to U.S. Trade Deficit
The list below shows America's deficit amounts for its top 15 trading partners.

China ... US$259.1 billion (up 11.4% from 2006, up 59.9% from 2004)
Japan ... $83.1 billion (down 6.1%, up 10.5%)
Mexico ... $74 billion (up 15.4%, up 64.4%)
Canada ... $65 billion (down 10.7%, down 1%)
Germany ... $44.5 billion (down 6.9%, down 2.8%)
Nigeria ... $28.9 billion (up 12.5%, up 97.3%)
Venezuela ... $28.4 billion (up 0.6%, up 40.4%)
Saudi Arabia ... $24.5 billion (up 1.8%, up 57.3%)
Ireland ... $21.6 billion (up 7.5%, up 12.5%)
Italy ... $20.9 billion (up 3.7%, up 20.4%)
Malaysia ... $20.8 billion (down 13.2%, up 20.4%)
France ... $14.5 billion (up 12.5%, down 36.9%)
South Korea ... $13.6 billion (up 2.5%, down 31.5%)
Taiwan ... $12.7 billion (down 16.7%, down 1.9%)
United Kingdom ... $6.7 billion (down 16.8%, down 36%).
Top Chinese exports to America are computers, accessories, parts and miscellaneous household goods. Japan's leading exports to the U.S. are passenger cars.



Read more at Suite101: US Global Trade Debt by Country: 2007 American Deficit Statistics for Top Import & Export Partners http://import-export.suite101.com/article.cfm/us_global_trade_debt_by_country#ixzz0jZU19AsL

http://import-export.suite101.com/article.cfm/us_global_trade_debt_by_country

And anyway, the real world international trade is not quite what it's like in Victoria.  Even if there is a resource that you got to import, it doesn't have to result in your country being a net importer.  In a floating exchange rate system, the value of the currency changes automatically to counter-act the net trade deficits or surpluses. 

To be fair to Alcibiades, I don't think that he is arguing that real international trade is like it is in Victoria.

Of course, floating exchange mechanism is short-circuited when countries peg their currency to the dollar.

Yes, but the results can be good for the countries using the dollar when countries peg their rates artificially low, as China apparently has.  Dollar users get much more value for their currency than a float would provide, for as long as the peg lasts.

If the US stopped buying its underwear from China and bought it from Vietnam instead, underwear prices in the US would go up by a coupla percent.  That would be inflationary, and thus bad.  Getting that coupla percent free from China sounds like a great deal as long as the Chinese are dumb enough to continue to subsidize American underwear purchases.

[grumbler]

Why economic war?

What is it good for?

[DGuller]

To be fair to Alcibiades, I don't think that he is arguing that real international trade is like it is in Victoria.

I was concurring with him, so that it was pretty clearly directed at you, as I'm sure you knew.

Yes, but the results can be good for the countries using the dollar when countries peg their rates artificially low, as China apparently has.  Dollar users get much more value for their currency than a float would provide, for as long as the peg lasts.

If the US stopped buying its underwear from China and bought it from Vietnam instead, underwear prices in the US would go up by a coupla percent.  That would be inflationary, and thus bad.  Getting that coupla percent free from China sounds like a great deal as long as the Chinese are dumb enough to continue to subsidize American underwear purchases.

In the short term, it's free money, especially if the economy of the dollar country is functioning normally.  In the long term, this can encourage systemic imbalances.

[alfred russel]

What throws off the standard analysis is that we are running a zero interest rate policy and still have minimal inflation. In the short term, there is a good argument that if our currency was allowed to depreciate against the yuan it would not result in any measurable domestic inflation and we wouldn't be stuck with the competitive disadvantage of an overvalued currency (either exporters or domestic companies competing with importers).

[Razgovory]

Don't bite the hand of your creditor...

Unless you plan on defaulting on your debt, which I don't think is happening anytime soon.

So what exactly is Germany's policy that needs to be revised?

That it exports more than the US does, even though it is far smaller. That is annoying.

There is a saying in the US.  If you owe the bank 100,000 dollars the bank owns you.  If you owe the bank 100,000,000 dollars you own the bank.

Anyway, why would we want to have an economic war with China?  What the hell good would that do?

[CountDeMoney]

Anyway, why would we want to have an economic war with China?  What the hell good would that do?

It would make me feel better.

[MadImmortalMan]

To piss off Zombie Nixon.