Tyler Too

Who’s Guilty For Mammoth China Trade Deficit?

By Gus Tyler

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The U.S. trade deficit with China is a mammoth $232 billion. America’s top trade envoy, Susan C. Schwab, has declared that she will take steps to bring down that deficit. To do so, she will have to go after the parties who are responsible for that deficit.

If she really intends to go after the guilty parties, she will find out quickly that she is a loner in the Bush administration and will be reassigned to a job like trade representative to Iceland.

The people responsible for the gigantic trade deficit are the corporate giants who dumped millions of American employees to transfer the jobs to China where labor costs are only a tiny fraction of what they are in the U.S. The firings were not limited to unskilled laborers; many were top-grade experts in their field.

Several states in the United States have actually taken steps to counter this growing outsourcing. They have withdrawn contracts from companies that indulge in outsourcing. As starters, Uncle Sam might do the same.

When an American company that once employed many workers in the U.S. dumps them to get the job done in China or any other country offering cheap labor, the finished product is intended for sale in the U.S. In short, it becomes an import that adds to our trade deficit.



Comments
Anita Tue. Sep 25, 2007

We can not blame China or other country for globalization. It is fact and should be accepted as it is. The basics of the economy based on trade. Reducing the trade deficit requires increasing exports and decreasing imports. That requires inducing foreigners to buy more U.S. made goods, and inducing Americans to “switch” their spending from imports to domestic made goods. Market economies accomplish this through changed relative prices. That calls for exchange rate adjustment that makes foreign goods more expensive for US consumers, and US goods cheaper for foreign consumers. The U.S. deficit with China reflects that US need export more to China. Welcome to AmeriChinaB2B( www-acb2b-com ) to begin your business trip of China.

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