Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
U.S. Trade Deficit with China edges up in November
The overall U.S. trade deficit in goods and services (seasonally adjusted) edged down in November to $38.3 billion from $38.4 billion in October. Meanwhile the U.S. trade deficit with China in goods edged up to $25.6 billion from $25.5 billion, as shown in the following graph:
Demand in China is currently growing at about a 10.5% per year pace while demand in the United States is growing at about a 2.5% pace. Normally, this discrepancy would cause China's demand for American products to grow much faster than American demand for Chinese products. However, China practices mercantilism and America practices unilateral free trade.
Chinese President Hu will be visiting the United States from January 18-21. WTO rules let any country that has with both a net foreign debt and a balance of payments deficit enact a scaled tariff to balance trade. President Obama could insist that Hu reduce China's trade surplus with the United States.
Journal of Economic Literature:
Atlantic Economic Journal: