The Nature and Extent of Trade between the US and China

The Nature and Extent of Trade between the US and China Name Institution Affiliation The Nature and Extent of Trade between the US and China Introduction As the biggest economies of the world, good China and the United States’ relations are important in attaining global stability and development. Current trade deadlocks between the two countries require concerted efforts in research and analysis to find ways of strengthening bilateral trade ties. The surge of Chinese imports into the U.S market threatens the local industry, whose ripple effect is mass layoffs from the manufacturing sector. Within the top three economic powerhouses, the United States, the E.U and Japan, China runs a trade surplus and is the largest source of imports for the U.S making the U.S the largest overseas market for Chinese products besides being a major source of foreign direct investment. Furthermore, Chinese economic dumping in the international market and its engagement in unfair trade practices through currency manipulation and exploitation is a worrisome trend. Conversely, access to the Chinese market and protection of property rights should be the focal point for the U.S, against the rising trade deficit with China. In retrospect, the imposition of trade sanctions against China’s manipulation of the currency market through unfair trade practices and removal of nontariff trade barriers should be endorsed by Congress for implementation. While China buys heavily from its Asian trade partners for manufacturing and also runs trade deficits with other countries such as South Korea, and Taiwan, U.S imports from China have been in specific sectors such as technology, telecommunications, and electrical machinery. China cleverly plays home to the newly industrialized countries in East Asia which have located their production facilities to the country. This paper explores various aspects of policy considerations for the Chinese international trade with the United States and other countries and assesses the various dimensions of US-Sino ties for the future trajectory. Lately, U.S. President Donald Trump has imposed high protectionist tariffs against imports of steel and aluminum from key trading partners such as South Korea, China, and the E.U in the pretext that China’s trade practices are unfair. China retaliated by also imposing trade tariffs on select products from the U.S. The combined tariff amount totals $100 billion worth of goods in 2018 alone. Why the Trade Imbalance? The economic relationship of both the United States and China is intertwined in the sense that both cooperation and competition characterize it; therefore it is in their best interest to look for ways of deepening their relationship. Statistics from the U.S Department of Commerce indicate that U.S trade deficit in 2017 was at a nine-year high of over $560 billion (Chong & Li, 2019). The total volume of trade was $635 billion with $130 billion being exports from the U.S to China and $505 billion being imports from China, indicating a trade imbalance of over $375 billion (SIDDIQUI, 2018). Several factors are attributed to this situation include structural adjustments occasioned by the rapid growth of the global economy, a misjudge of the US-China trade deficit by using conventi...