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Regardless what we think of Trump’s tariff war, the trade imbalance between China and the US is indeed substantial and unsustainable in the long term.
In typical Trump fashion, when he talks about trade, he chooses to cherry pick and talk only about the merchandise trade where the US runs a trillion dollar trade deficit with nearly all major economies.
He conveniently neglects to mention the equally massive service trade SURPLUS the US runs with the rest of the world, including China. This includes digital trade, intellectual property rights, financial services, business services, media and entertainment, tourism, education, and more.
Of course, it is easier to paint the US as a “victim” of global trade if the focus is solely on merchandise trade. The case against global trade gets diluted, even entirely negated, when one looks at the full spectrum of trade and how the US benefits disproportionately from the service trade and runs the world’s largest service trade surplus. But fairness is never the goal here.
The intellectual dishonesty is not limited to the skewered view of trade but also extends to the avoidance of a deeper discussion of the structural reason behind US merchandise trade deficit.
As is well known, the US has been deindustrializing since 1950s as its manufacturing job peaked in late 40s (37% of total employment) and the economy started to move towards a consumption and service based economy.
By 1971, less than 25% of US employment was in manufacturing. By 2000, it fell to 13% and today manufacturing employment hovers around 9% (more or less so for a decade).
Although NAFTA (1994) and China’s entry into WTO (2001) are regularly invoked as key events driving deindustrialization, the US manufacturing employment and GDP contribution has been on a smooth downward trend since 1945. By the time China ramped up manufacturing in mid 2000s, deindustrialization was completed and the US was already a service-based economy. You can refer to the many books on the subject published before 2010. A short list here –
- America’s Rustbelt: The Economic and Social Effects of Deindustrialization (1987)
- Beyond Rust: Metropolitan Pittsburgh and the Fate of Industrial America (1989)
- The End of Detroit: How the Big Three Lost Their Grip on the American Car Market (2003)
- The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans (2005)
- The Great Divergence: America’s Growing Inequality Crisis (2007)
There are many reasons behind the deindustrialization of the US economy –
- Finance, tech, and healthcare have risen. The FIRE sector (finance, insurance, and real estate) is an ever bigger part of the economy; tech sector has boomed; and healthcare industry has ballooned (now accounting for 18% total GDP). Together with retail, media, entertainment, business services, education, the US economy has moved away from production to become a consumption and service based economy, i.e. the New Economy.
- High costs in the US have made manufacturing uncompetitive. The financialization of the economy has driven costs of factors of production to such a high level that makes local manufacturing simply not competitive.
This includes high labor costs (necessary to cover the overhead costs of healthcare, housing, education, etc.), high regulatory costs, high land costs, essentially all critical input costs.
At this point, the US simply cannot produce competitive goods and merchandise even for the highly paid American workers to buy, let alone export to foreign countries. Note that the US has the highest GDP per capita among major developed economies and enjoys much higher income. If the Americans cannot afford to buy local, how can consumers in Vietnam or Cambodia or even Portugal afford such?
- Technology and automation is another big factor behind the loss of manufacturing jobs in the US. Although redistribution of factory jobs to lower cost countries is often cited as the victimization of American workers, studies have shown more job losses are attributed to improved productivity and automation than offshoring.
Trump has identified deindustrialization and loss of manufacturing jobs as a national emergency. But he fails to understand the deeper underlying reasons and therefore is destined to come up with the wrong solutions.
Simply put, tariff will not make US manufacturing competitive. The inherent high cost of producing in the US means few low income foreigners can afford US manufactured goods even if the country has the production capacity and can export at zero tariff.
The world won’t buy from the US and balance its merchandise trade deficit even if it wants to.
The flip side is the US is very competitive in the services industry and therefore runs a large surplus there.
Global economy works on market-based principles, not the whim of a low intelligence reality show personality.
That said, for entertainment, let me hypothesize a few ways the US can balance its merchandise trade with China. Though unlikely to ever transpire, they are more grounded to economic reality than Trump’s fantasy.
- China can stop exporting goods made by US companies in China. Between 30 to 40% Chinese exports to the US are by US companies like Apple, Tesla, GM, Pfizer, Dow Chemical. These companies manufacture in China to sell to the Chinese market and they also export to their home market and other countries, taking advantage of the lower production costs, superior supply chains and infrastructure in China.
- China can stop the export of goods made by European, Japanese, Korean, Taiwanese companies in China to the US. This accounts for another 30% of US-bound Chinese exports. This would affect companies such as VW, IKEA, Toyota, Panasonic, SK Hynix, Samsung, TSMC, etc.
- China can stop all export of critical minerals to the US, including rare earth, cobalt, lithium, aluminum, copper. China can also stop the export of batteries, solar panels, drones, legacy semiconductor chips, mining and processing equipment, tooling machines, etc.
- China will mainly focus to export toys, apparel, shoes, furniture, luggage, plastics, home electronics, Christmas decors, etc. for Walmart and Amazon.
- China can increase US imports such as F-35 fighter jets, Patriot missiles, Virginia class submarines, M1-A1 tanks, bunker buster bombs, depleted uranium munitions, etc. After all, the US is the world leader in arms manufacturing and has an unassailable competitive advantage in this field. It should be open to sell to China to balance its trade deficit.
- China can import more Nvidia chips, Palantir surveillance software, SpaceX communication satellites, another field the US has market-competitive offerings.
- China can import more corn, beef, chicken, soybean from the US peasants – of course, eggs are off limit. The US needs them…
The optics may be bad for the American peasants to sell agricultural goods to the Chinese peasants who make manufactured stuff and lend money to the US government. But optics be damned since we are trying to balance the trade deficit.
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A good column. But you’ll have to wait for a future change in Administrations and politics here for common sense to return.
The USA is still competitive in various industries with very high value-added, despite the cost challenges here. Obvious examples include aircraft engines, satellites, chip making equipment and medical equipment. I think a key goal of re-industrialization is to improve competitiveness in these sectors so they are not lost. The next goal is to bring back production in the high value-added tiers a bit lower down. Much of this tier is probably capital goods which were made in the USA as recently as ten years ago. Manufacturing of low value-added consumer items may only return based on automation. I think the US can also benefit by extending production of higher value-added consumer items, Mercedes-class cars might be an example.
Trump and his advisers obviously know this expanded US production cannot happen without reduction in regulations, business paper work, bureaucracy and taxes. These are major reasons why US production was offshored in the first place. The relationships between unions, business and government will have to be updated as well.
Look at the Cybertruck. It’s a premium (judging by its price) American-made BEV but the quality just isn’t there. And Elon is supposed to be the person who knows more about manufacturing than anyone else in the world!
There’s really only one way to bring manufacturing back to the US and that is by devaluing the dollar, among other things. But that would undermine the USD role as reserve currency, which goes against imperialist ambitions of the US government. So, either the US has to give up its empire, or it will continue to suffer from unregulated financialization of its economy and the resulting uncompetitiveness of its manufacturing. Why would anyone invest in manufacturing stuff if they can make a trillion dollars in one day doing some silly things with derivatives (and get bailed out of they go bust)? If you’re a private equity fund, why not buy out some American manufacturer in a leveraged buyout, assets strip it and move production to Asia? That’s how you make serious money and ” create shareholder value”, not by investing in expansion of manufacturing in America.
The decline of the American empire will be good for the people and manufacturing in the long run, but it will be a difficult transition to being a normal country with its dumbed down population and chronically underfunded infrastructure. A generation of humiliation is coming. Maybe some leader will rise who will actually Make America Great Again after that.
How about the US either tariff the shit out of countries that relabel Chinklander goods for re-export to the US under their own “Made in Some Dumb Fuck Nation” label …. or just ban the import of some plainly not locally produced goods form those nations?
Chinkland uses this method to avoid tariffs on probably around (and likely more) $100 billion in goods.
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I kind of think that these 3,521% tariffs are a step in the right direction … but only a step. LOL!!!!
https://www.bbc.com/news/articles/c5ygdv47vlzo
US sets tariffs of up to 3,521% on South East Asia solar panels
Some solar equipment exporters in Cambodia face the highest duties of 3,521% because of what was seen as a lack of cooperation with the Commerce Department investigation.
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Difficult to argue with your points. I am hoping for a middle ground, though not because I want to perpetuate a broken system. I just think the risk of widespread chaos and death and destruction is very high in the event it collapses.
The Rivian truck might be a better example than the Cybertruck. I have no idea if either is any good. Cadillac has brought out an upmarket car model probably targeted at hedge fund managers.
These two paragraphs make more sense than the entire article, which is as stupid as the author thinks Trump is.
I hope any major crisis in the West results in at least some Western countries implementing some novel economic and social policies that might seem unimaginable today but might be the best thing ever. Like expelling the Jews, browns and blacks, implementing gold standard with full-reserve banking, Whites-only open borders policy, things like that. Only a crisis could open a window of opportunity for experimentation like that. Let’s just hope we don’t get another world war in the process…
Now the impact of the trade war on China is estimated to be a hit to the economy of around 2.5%.
Now let me toss some cold water on that number.
China exports around $100 billion in goods to ASEAN nations for relabeling and re-exportng to the US. As shown by the recent tremendous tariffs on ASEAN sourced solar panels, the US is wise to this Commie Chink trickery.
Adding another $100 billion in goods (granted it is a guesstimate) to the top line loss of $440 billion in Chinese goods that will no longer be exported to the US brings the total loss to $540 billion.
Now the real jinx is the real size of the Chinklander economy. Most people examining the size of the Chinklander economy come to the conclusion that it is likely only 2/3rds of the stated value with a few outliers claiming it is only 1/3rd. Some of this fake economy comes from the fact that totalitarian regimes LOVE to heap praise on themselves by inflating economic growth by around 50% of the actual growth. Meaning that 1/3rd of any reported growth is fictional. Another sign that the Chinklander economy is smaller then stated is the real estate sector which has been in “crash and burn” mode for the past 4 years. It used to make up around 30% of the Chinklander economy and now is probably around 10% of that economy … losing a massive 20% share …. or around 5% per year for those 4 years. Something not found anywhere in Chinese economic data.
Because of the real estate crash, it is likely that in recent years Chinkland has seen negative growth of up to 5% instead of positive growth of 5%. In other words it is already in a depression and possibly in a “Great Depression”.
Dividing the top line $540 billion by an economy that is likely only $12 trillion gives the share of US exports to the US at a more massive 4.5% of the economy.
Toss in a further loss of .5% as the loss of services provided by Chinkland to the US and we can round out the Chinese losing about 5% of their economy.
The above is a minimal loss as foreign firms manufacture in Chinkland for export to nations other then the US. Losing the US market makes it very very attractive to move manufacturing out of China and many corporations will do so, adding yet more loses for the Chinese economy. Now while it is uncertain how much manufacturing those firms will move out of China, a good guesstimate is a cool $1 trillion dollars or around 8% of the adjusted Chinklander economy.
Now many of the goods in the 5% exported to the US and the 8% of goods that will no longer be produced in Chinland overlap, so you can’t add the two numbers to get a final result. However, a reasonable reduction to a total loss of around 10% should be about right.
Due to the trade war, Chinkland is looking at a loss of around 10% of their economy. 5% in the short term as exporting to the US will no longer be profitable and another 5% over the course of multiple years as companies move production out of China.
The fact the foreign investment by foreign firms into Chinkland went negating in the 4th quarter of 2024 just shows that the trend toward moving foreign owned production out of Chinkland is starting to move into high gear.
Sucks to be them!
May future generations of Chinklanders learn to not place fentanyl into the hands that feeds them. Amen!
if the fire sector wasn’t bad enough, we have the fire government, which consists of fraud, incompetence, racketeering, and embezzlement. both of these enablers are leading us to the fire sale of our country. we have been so thoroughly looted as a nation, our economy has run out of things to loot and now the last assets of country, are our personal possessions and every last dollar will be vacuumed upwards, as our meager possessions are auctioned, to satisfy our creditors.
as the last property on the monopoly board of america, is bought up, tent city america will reach its height. large herds of broken homeless, wanderers, left to their own devices. the heartless bastards will enjoy their suffering immensely, at least the nazi’s would have provided camps, or work farms, gulags if you prefer. get ready for the hoholodomor, coming to a country near you, followed by the hoholocaust. you see ukraine and palestine are predictive programing. we’re all slavs (slaves) and palestinians (philistines) now.
An absurd article that proposes a fix to the American economy by China voluntarily sinking it’s own economy and throwing the majority of it’s workers on the street and out of a job and entirely depend on it’s own consumption to maintain it’s industrial base. Including the illusion that the US GDP is the largest in the world which is really slight of hand by those that include the value of potentially for sale and unsold real estate and other unproductive activity as GDP. Also, that a small US surplus in services can offset the massive goods deficit. Since when does the service sector in the US do anything that any other country couldn’t also do for itself? Does he want the Chinese to pay American real estate companies to sell it’s houses and land or sell it’s burgers and fries or treat the health of it’s people without moving to China? Then there’s the absurdity of China even wanting to buy an F-35 or any other junk the US war machine makes and stop making the super hi-tech armaments it now makes for itself. Is this guy a real economist or just another dreamer.
If China would agree to take a hundred year treasury bond interest free for all of the trade imbalances then I am confident even Trump will not have any problem’s HAHAHAHA. China what nerve of them to want real gold for their products. Don’t they understand the dollar is as good as gold ( just don’t exchange it for it ) Poor Janet Yellen was so close to convincing the Chinese to buy Treasuries, and Xi was so disrespectful to Blinken being caught on mic asking when Blinken was leaving, the nerve of those peasant Chinese, they represent the best of the best of the mighty Washington and Xi should be honored to be in the aura of their presence!!! USA USA
Real economist???? You must be joking!!! LOL!!!!
If he lives in China and is posting outside of China, then he most likely is a paid propagandist. You get fined by the Commies if you are a Chinese using a VPN to post outside of China.
You actually reminded me of an old Soviet propaganda quote
A US reporter was in Moscow and asked a local the following question
“I can be in Washington and be able to criticize the US government all I want. How about you here in Moscow?
the local then states “Here in Moscow, I too can criticize the US government all I want!’ LOL!!!!
Have you ever seen Hua Bin ever criticize the Chinese government? LOL!!!!
Trade War is turning into a giant pump n’ dump scheme. It’s all about generating massive daily moves in stock indices now. Everyone will get blanket pardoned by Trump before leaving office.
Global capital is currently grossly over-allocated to the US.
Once the US economy goes into recession and US consumer spending crashes, Trump will have no leverage to negotiate any trade deals because everyone will see that the US consumer is broke.
US trade deficits will shrink automatically from falling US consumer purchasing power. Growth models that relied on generating large net export surpluses vs the US are not sustainable.
The free trade environment of the past 40 years have given people the wrong impression that manufactured products will always be affordable and widely available.
it’s Cournot competition in game theory….look it up.
Chinese economist speech on tariffs and Jewish financial power by Liu Yuhui at the Ningbo Bank Private Banking Investment Strategy Meeting on April 20
Link: https://web.archive.org/save/https://finance.sina.com.cn/roll/2025-04-22/doc-inetyyfe1152430.shtml
The author is a propagandist for the CCP.
Unz has become infested with wunzmao; paid mouthpieces for the CCP. The comments section is packed with anonymous sinosuckups. Some are even stupid enough to be unpaid!
Note that on Unz, there is NO counter perspective on China. No author column exists here to counter the CCP propaganda pushed by Bin.
In China, no dissent is allowed. There is no western communication allowed into China which isn’t CCP sanctioned.
Yet, Chinese and hammer & sickle eyed white monkeys are free to spout their love for the CCP anywhere in the Western world.
There is no analog in China where a Westerner outside of China can openly and freely engage with the average Chinese person on an internet forum in China !!!
Of course not. China is a police state.
Massive hypocrisy. Where then is the coveted yin / yang balance which defines the Chinese universe where there is nothing but Bin, and no Yang. There’s un-natural imbalance going on which can not last.
The CCP knows they have to maintain tight control over their population and any spark of an original idea might throw the power balance out of their favor. Mao said a spark can alight a prairie fire. Let’s piss on that spark before it even happens.
The CCP is a gang of powermad, psychopathic paranoics. The end always justifies the means for them, and raw total perpetual power is their goal.
For any Chinese reading this, and any idiot wunzmao, do you really want to be the type of man who would turn his own Mother in to the CCP?
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So instead of being forced to avoid Chinklander goods due to high prices from tariffs, we will avoid them because we have no money.
Assuming you are correct, then either way the US market for Chinklander goods is GONE!!!!!!! ROTFLMAO!!!!!!!!!!!
Funny that! The US trade deficit kept on growing! If it takes a trade nuke for that trend to reverse then I am all for a trade nuke.
You mean that they weren’t affordable and widely available before 1985??? Not only were they available and affordable but of much better quality. I still have a 40 year old mini fridge that’s going strong. LOL!!!!!!!!!
Ultimately, if we want to look at this from the perspective of kokutai (which is really how we should be viewing it — and is how the Asian countries view it –) which is not to satisfy “the economy” or to validate the views of some fuck like Adam Smith or some Jew like Ricardo…
The point of “re-industrialization” is not to justify some textbook view of economics, it is to re-invigorate the lives and economic prospects of the WHITE working class. Who are being decimated through “deaths of despair” and deliberate, willful, criminal, Jew-induced opioid poisoning.
All the factories in the world won’t help the USA if they are merely staffed by low-wage illegal or semi-legal Filipinos and diabetic Guatemalans. THAT IS NOT THE POINT. The point is that the USA is (or was) a NATION, not an “economy”, and that as a nation it is explicitly an extension of the white Christian West, NOT an international conglomerate or an “idea” or whatever other poisonous nonsense the Jews will cook up next week in order to undermine and destroy the goyim.
Re-industrialization does not matter if it is not hand-cuffed to anti-immigration, and dedicated to the actual underlying purpose of White American fertility, and healthy White family formation, and White prosperity. Which is what made all the shitstains want to sneak in here in the first place.
Wot, me wolly? 🤣
The author is trolling thickly (-> J. Swift, A Modest Proposal) 😋
1. Reminds me of an old saying (current application.)
内无相，外无将，不得已玉帛（美金）相将，将来怎样
天难度，地难量，这才是帝王（民主）度量，量也无妨
2. Western nation presses love to blame their problems on China. They often denigrate China’s manufacturing as “over production.” And the accusation was then repeated by Western politicians. In reality, every company everywhere would inevitably follow the iron law of Marginal Revenue equals to Marginal Cost (MR = MC) . It naturally increases production until MR=MC to maximize profit. And reduces production if MR is less than MC, else the more it produces, the less it would get overall. So overproduction over the long term is not a real issue
If one look deeper, the Sino-US trade relation is no difference from the trade imbalance between Saudi Arabia and a nation without energy reserve and at the same time not good at manufacturing.
In the case of China, it is able to manufacture better with less because of its human capital and cultural capital. Important inputs to any country’s development or lack of development but often ignored by the presses as well as politicians.
Both human and cultural capital are part of a country’s resources. Not different from oil reserve of Saudi Arabia. The latter is energy resource rich, China manufacturing talent (a combination of human capital and cultural capital) rich.
And a lot of hot money will leave the US.
In some sense the lot money leaving in drove is a matter of when, not if. The global tariff war makes the danger clear and present.
I ran across an interesting factoid recently. With all the Chinklander lickspittles on this site pimping how China is pulling ahead of the US … here is a dose of reality.
The JL-10 Chinese jet trainer uses Ukrainian jet engines … because somewhat improved 25 year old Soviet tech is still better then brand spanking new modern Chinese tech. ROTFLMAO!!!!!!!!!!
https://defence-blog.com/ukraines-motor-sich-awarded-800-million-contract-to-support-chinese-jl-10-trainer-fleet/
Ukrainian manufacturer of jet engines Motor Sich has agreed to a record $800 million contract with People’s Liberation Army for turbofan AI-322 engine production, according to multiple reports.
The story was first reported by Defense Express, which cited a defense industry source that stated that China is buying a batch of 400 AI-322 engines for JL-10 fighter trainer aircraft and its L-15 export version.
right now as i read this there are 25 comments. it must be night time in east asia, in the next 12 hours there’ll be 200 comments from cpc agents. one of em is here early see #23 and #24.
A lot of money is already leaving Chinkland! Foreign investment went negative in the 4th quarter of 2024. LOL!!!!
Meanwhile a LOT of corporations are investing in US production …so that they don’t have to pay Trump’s tariffs. LOL!!!!
Trump claims as much as $5 trillion in new investments have already been announced.
see above
also see above! LOL!!!!!
In other news: The Chinklander plastics industry is facing DOOM as most of its feedstock comes from the US … there are no alternative sources of that feedstock … and they are now subject to 125% Chinklander tariffs.
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Yankee paranoia is definitely ‘World Class’. You cannot abide other opinions, can you.
The projection inherent in the gibbering of this racist, Yankee supremacist, troll is HILARIOUS. His family name is Hua, by the way, racist moron. Why need Unz publish the sort of hate-crazed racist bilge that infects ALL Western media, when hate-crazed, racist, gibberers like YOU are here, en bloc?
Good to see the Chinese understanding Jewintern power. But he errs-Jewish finance controls BOTH US parties, not merely the Democrazies.
China very very bad. It’s gonna collapse real soon. China bad, very bad. USA really good. I hate myself bc I m Hafu. USA so so good. China imminent collapse. It’s really bad there. Please love me.
Gordon (uncle) Chang
If right-wing is a stand-in for MAGA then what he writes makes sense. Even though the leader of MAGA is controlled by Jewish power, his supporters include many who don’t like Jewish power at all.