On trade, What justificaion does the USA have to accuse China of 'selling too much not buying enough from USA'

Question

There's a trade war (dispute) going on between USA and China, and it boils down to the USA accusing China of not buying enough American products, relative to what they sell to America.

Putting aside other accusations such as currency manipulation, cyber security hacking, etc. If we just focus on this central accusation of 'You are not buying enough of my stuff, while selling too much stuff here!"

I don't understand how that can be a valid 'accusation'. Buying and selling are willing actions taken by market participants, made as a result of their own economic situation. China has total freedom to decide what and how much to buy (import) from any country, as does the USA. If China decides not to buy certain products it probably means either it thinks those products are too expensive, too low quality, or maybe China doesn't need them. Same with USA - it decides to buy certain products from China at certain amount because it has decided it is the right product at the right price and amount. My point is, USA can decide to buy however much from China and vice versa. These are willing market participants.

If so, how can any country 'accuse' of another of not buying enough or selling too much? Whatever China sells is agreed to be bought by USA, it's not like China forces USA buy its stuff. And whatever China buys from USA is its own decision.

Answer 1

The US president see’s trade as a zero-sum game, where there is always a winner and a loser, being the winner the one who sells more to the other. This view is not shared by most economists, as the mainstream opinion is that international trade is beneficial for both parties (see Ricardo or Krugman for examples).

In the US’s president mind, “to win the game” they must restrict the sales of Chinese goods, using tarifs or quotas. The US can either produce these goods or import them elsewhere. The Chinese, however, are expected to have no other alternative but to keep importing advanced goods, critical for their economy, such as aeroplanes parts from Boeing.

The expected outcome from this policy is less competition for national producers, potentially resulting in more jobs and higher profits. However, end consumers might end up facing higher prices for several goods, resulting in lower real incomes.

Answer 2

There's no technical justification, it's a political statement. Most trade wars are, in fact, the fruit of politics.

Answer 3

Why shouldn't that be a valid accusation. The numbers speak a clear language. But that isn't even the main problem. The actual problem is, that while the US was stupid enough to listen to "economic experts" that always told them to open their markets more and more, China was smart enough to massively restrict it's own marked for foreign industries. As an example, if you are a car company and want to sell your products (cars of course) on the chinese market you either had to pay 25% import taxes or, if you wanted to skip that by producing partly in china directly, you had to do it together with a local car manufacturer. That puts the US economy in a huge disadvantage with the results visible in the numbers above.

So the accusation that import/export between china is way of to the benefits of china is correct as well as the accusation that they doing it on purpose.

Answer 4

When you start importing products from China, you are exporting your jobs to China. It's called outsourcing of jobs.

That's ok as long as you are also exporting products in China, and then China is also outsourcing their jobs into the USA.

Say USA is importing Chinese cars valued at $10 billion. That removes say 10,000 jobs from the American car making industry and those jobs are sent to China.

But you also export cars to China - valued at $10 billion. That removes 10,000 jobs from the Chinese car making industry and those jobs are sent to the USA.

It's ok to have high amounts of international trade. What is not ok is to have a trade deficit. If your imports are above your capacity to export, that means the American jobs are sent into China

These "economic experts" Etalia is talking about are always trying to create confusion and to convince you that you have to increase the poverty in order improve the economy. And they are intensely promoted by the mainstream media. That's the very reason why I'm not watching the media since many years ago and I recommend everyone else to do the same.