[EpochTimesOctober92021](Epoch Times reporter Lin Yan comprehensive report) Former U.S. Trade Representative Robert Lighthizer recently submitted a book to the Economist magazine, saying that the United States passed Transfusion of blood from the trade deficit to China will only feed the Communist Party and harm the interests of the United States and the world at the same time.
Lighthizer said that the deficit between the United States and China is so huge that the United States needs new thinking and (to China) to maintain high tariffs.
As an experienced international trade lawyer, he also held important trade positions in Trump (Trump) and the Reagan administration. Lighthizer led the past phase one trade agreement between the United States and China, and was a target of both fear and admiration of the CCP. .
In addition, as a media that has long advocated free trade theory, the Economist chose to publish Lighthizer’s conservative trade theory is also rare.
So what signals does Lighthizer send out in this long article that cannot be ignored? He suggested that the U.S. government increase tariffs and charge foreign funds for investment in the U.S. securities market.
First of all, Lighthizer corrected a misunderstanding of thinking-the trade deficit does not pass in one year, it is cumulative. If the trade deficit trend is maintained for a long time, the economy will be quite dangerous.
“People often think that trade deficits are on an annual basis, but in reality they are cumulative. (People say) it doesn’t matter whether some years are deficits and the remaining years are surpluses, because they will be flat. But this is not what happens in reality. The important issue is not the US’s annual global trade deficit, nor the bilateral trade imbalance, but the long-term trend of huge deficits (accumulated) without any surplus over the past few decades.”
He said that the trade in these years is equivalent to the United States giving its trillions of dollars of wealth to other countries, and China has gained the largest piece of it.
Lighthizer warned that if the US-China trade deficit is allowed to continue, the US will die from excessive blood loss.
The United States is the world’s largest importer and the world’s largest debtor
Lighthizer said that he is not trying to discredit the benefits of trade. He also sees the fact that trade has benefited parts of the United States or some industries.
“The problem is, so far, the United States is also the world’s largest importer, which also makes her the world’s largest debtor country.” He said, “In fact, trade is slowly causing this country to lose blood; one The country has become a huge, continuous trade debtor.”
He said that for more than two decades, the average annual trade deficit of the United States has exceeded 500 billion U.S. dollars (about 3%-5% of GDP), and this number is still growing.
“In many ways, deficits are not a good thing. They will drag down economic growth, have a negative impact on the composition of the labor force and wages, and cause macroeconomic distortions.”
Lighthizer believes that it is a complete surprise that the United States has become the world’s largest import consumer and debtor at the same time.
Trading production resources and economic future for consumer goods is not worth the loss
Lighthizer explained that the other side of commodity trade is the flow of funds. The United States is using production ownership and economic futures in exchange for consumables. “More importantly, because of these persistent deficits, the United States transports its trillions of dollars of wealth to foreign countries in exchange for goods, usually short-term consumer goods.”
“These U.S. dollars are not just placed in foreign treasuries. Our trading partners in turn use them to buy U.S. assets and debt instruments.” Lighthizer said, “In a real sense, the U.S. is using its productive assets. Ownership and economic future in exchange for short-term consumption.”
He also pointed out an interesting phenomenon. Few countries in the world have large trade deficits. In terms of absolute scale, there are Britain, France, Canada, India and the United States. On the other hand, only two countries have always maintained huge trade deficits. Surplus-China and Germany.
“Many people believe that both countries have benefited from artificial currency devaluations, different levels of industrial (subsidy) policies, and citizens who are willing to give up current consumption,” he said.
U.S. blood transfusion to China through trade will only feed the Communist Party
Lighthizer said that another negative effect of the huge wealth transfer caused by this trade is that the US’s largest bilateral trade deficit target is China.
“Generally speaking, if there are no unfair practices or systemic problems, I would not think that bilateral deficits are a problem. But transferring wealth to China is another matter,” he said.
“China is not only our global adversary, but it is also competing with the liberal and democratic systems of the West to determine whether ours or their systems will exist-liberal democracy or authoritarian socialism is better.
“It is no exaggeration to say that the hundreds of billions of dollars we send to China each year have made the Chinese Communist Party fatter and helped it pay for the huge expansion of military capabilities. This is neither in the interests of the United States nor in the free world. Interests.”
Increase tariffs across the board and maintain high tariffs at least temporarily
Lighthizer believes that another solution to reduce the trade deficit is to impose temporary tariffs on all imported goods and gradually increase or reduce tariffs based on the level of the deficit. For example, a 10% tariff can be imposed on all imported goods. Currently, the average import tariff in the United States is about 3%.
“If the deficit does not fall in a few years, increase the tariff to 20% in the next few years. If this does not produce the desired effect, the tariff increases to 30%. Exceptions are made for key commodities. When the deficit is significantly reduced, the tariff It will also drop and will eventually be cancelled,” Lighthizer wrote.
He said that changes to the tariff schedule and taxation of funds flowing into the United States to buy securities will reduce the trade deficit.
Lighthizer said that the current state of US foreign trade has led to the hollowing out of the manufacturing industry, the loss of millions of jobs, and the inequality of wealth. The small and medium-sized towns that once had manufacturing industries have become economic deserts. The industry was taken away by Mexico and China.
Lighthizer: Biden’s trade campaign platform is basically the same as Trump’s
Lighthizer rarely talks about domestic politics in the United States. He said that economists can theoretically justify the benefits of trade, but American voters have their own instincts. This is part of the reason why Trump was elected president in 2016, and Trump has been practicing it during his tenure. His trade policy and increased tariffs on China.
Lighthizer also said that in fact, Biden and Trump have basically the same campaign platform in 2020. Biden has given up his past support for the Trans-Pacific Partnership (TPP). position.
Dai Qi, the current U.S. Trade Representative, delivered a long-awaited speech on the U.S. government’s China trade policy at a think tank on October 4, although she proposed to “re-coupling” and “enduring coexistence” with China in her speech ( Durable coexistence) and other new words, but most experts and analysts believe that the Biden administration will basically continue the Trump administration’s China trade policy, including tariffs.
Editor in charge: Li Yuan#
.
