By Bill O’Brien (former Speaker of the NH House)
In 2018 the U.S. bought $559.5 billion in goods and services from China. In turn, China bought $120.3 billion in goods and services from the U.S.
In order to sustain even this unbalanced trade, the U.S. had to endure Chinese requirements that U.S. companies transfer our technology – our seed corn for future growth – to them. And even that abuse has been only one of many, at times, almost impossible to overcome tariff and non-tariff trade barriers.
Free trade has brought fantastic prosperity to the world. Universal free trade should be a goal of our foreign policy. But that goal cannot be achieved or sustained if only the U.S. is the free trader and the rest of the world, and most especially, China are mercantilist bullies.
Unemployed American manufacturing workers cannot be the foundation of universal free trade.
President Trump is surely correct in pushing China to adhere to the same free trade rules we live under. Moreover, we can fight this battle at relatively little cost to us, while China’s risk is much greater.
If we shut down trade to China entirely, at the 3.2% growth of our $20.41 trillion economy (2018 GDP), our exports to China represent less than three months’ growth ($54.4 billion a month) of our economy. In other words, exports to China amount to six-tenths of one percent of our economy, while the economy itself is growing at 3.2% a year.
By contrast, loss of the $559.5 billion in Chinese exports to the U.S. would blow a 5% hole in China’s fragile, export-dependent $11.5 trillion economy. This surely is a real incentive to China to engage in free trade.
If not now, when?