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China Cause America's Trade Problems?

July 19, 2017
Yukon Huang

'America's trade problems are not the consequence of China's policies.'

1. 'China Did Not Cause America's Trade Problems' Copy

About China & the U.S. trade deficit

'America's trade problems are not the consequence of China's policies.' 

Yukon Huang, China economy guru at the Carnegie Endowment, has once again upended what I thought I understood about a particular China issue - this time U.S-China trade. And, more annoying, he has, as you will see, the data to back up his contentions. 

During our conversation, he told me...

America's trade deficit with China has been surging.

So people say, 'If I want to solve America's trade deficit problems, the simplest way to do it is to somehow narrow the trade deficit with China.'

This is why Donald Trump comes up with the view that China is the problem, but it's basically wrong.

Using this chart, Yukon explains that China's trade surpluses and U.S. trade deficits don't coincide...

Notice that when America's trade deficits start to get smaller, around 2005 or 2006, China's trade surpluses start to get bigger. They actually move in the wrong direction.

What this diagram shows is that there is no direct link between China's trade balances and America's trade balances.

It's a mistake to say that America's trade problems are the consequence of China's policies.

There's a lot more to Yukon's analysis. To see how he gets to these conclusions, watch his video. It's only 6 minutes -  you won't look at U.S.-China trade the same way again.

Yukon Huang

Yukon Huang

Carnegie Endowment
  • Senior Fellow, Carnegie Asia Program Carnegie Endowment for International Peace
  • Research focuses on China’s economy and its regional and global impact.

Channels

AsiaStrat
Granite Peak Advisory
Track Research
Trivium China
Gao Feng
Real Estate Foresight
China Beige Book

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Yukon Huang

Yukon Huang

Carnegie Endowment
  • Senior Fellow, Carnegie Asia Program Carnegie Endowment for International Peace
  • Research focuses on China’s economy and its regional and global impact.

Channels

AsiaStrat
Granite Peak Advisory
Track Research
Trivium China
Gao Feng
Real Estate Foresight
China Beige Book