The Wall Street Journal: Why the U.S. probably won’t succeed in halving its trade deficit with China

The White House is likely to fall well short of a plan to slash the U.S. trade deficit with China by half, in large part because American farms and factories will find it hard to produce enough exports to meet that goal, trade experts say.

China’s chief economic envoy, Liu He, is in Washington for talks with the Trump administration that began Thursday on the U.S. plan, which was presented during earlier talks in Beijing. The eight-point plan’s first goal: “China commits to work with Chinese importers” to reduce the U.S. trade deficit with China by at least $200 billion by the end of 2020, according to a copy of the proposal.

Read: Beijing proposes cutting trade surplus with U.S. by $200 billion: reports

Although economists say trade deficits are caused by broader macroeconomic trends tied to how much a country saves and spends—not by changes in trade policy or exports of particular goods—President Donald Trump has sought to manage trade flows to reduce the deficit, and has sought China’s cooperation in achieving that goal.

Read: Congress set to advance bill easing ability to block Chinese acquisitions of U.S. firms

Even if the two sides could agree on items to target—they don’t—and even if China cooperated by lowering import barriers, trade experts say the U.S. simply doesn’t have the capacity to ramp up production enough to make the $200 billion goal.

An expanded version of this report can be found at WSJ.com

Also popular on WSJ.com:

Buyer beware: hundreds of bitcoin wannabes show hallmarks of fraud

‘I am the mastermind’: Mohammed bin Salman’s guide to getting rich

Filed in: Top News Tags: 

You might like:

Asia Markets: Most Asian stocks rise with Nikkei on track for five-day winning streak Asia Markets: Most Asian stocks rise with Nikkei on track for five-day winning streak
In One Chart: One chart puts mega tech’s trillions of market value into eye-popping perspective In One Chart: One chart puts mega tech’s trillions of market value into eye-popping perspective
Trump tax cut gives U.S. workers a hard landing Trump tax cut gives U.S. workers a hard landing
In One Chart: This 1 chart puts mega tech’s trillions of market value into eye-popping perspective In One Chart: This 1 chart puts mega tech’s trillions of market value into eye-popping perspective
Why is this market more troubled by rising U.S. interest rates than trade tariffs? Why is this market more troubled by rising U.S. interest rates than trade tariffs?
Earnings Results: IBM earnings beat fueled by mainframe sales, but that strength may not last long Earnings Results: IBM earnings beat fueled by mainframe sales, but that strength may not last long
Exclusive: Amazon denies it will challenge Cisco with switch sales Exclusive: Amazon denies it will challenge Cisco with switch sales
Personal Finance Daily: Why husbands and wives lie about their salaries and you should make your Venmo account private Personal Finance Daily: Why husbands and wives lie about their salaries and you should make your Venmo account private

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.