Trade war baloney
Re: "China could yet win trade war with Trump's America," (Opinion, Aug 8).
The main reason Trump could yet win a trade war is because the reason to start the war is based on false allegations. At a recent rally outside Columbus, Ohio, President Trump once again reiterated that China has a $500 billion surplus over the US for decades. According to Trump, China has grown to prosperity at the expense of the US. Let us look at the facts of modern China's economic development.
In 1978 China's Daeng Xiao Ping opened up China's market to foreigners. In 1980 the US under President Bill Clinton granted Most-Favoured-Nation (MFN) status to China as an incentive for promoting the trade between China and America. In the next few decades, China's exports leapt forward and blossomed. In those days, the annual Chinese Trade Fair in Guangzhou was like a one-stop shopping mall that had attracted thousands of overseas buyers. By 2001, China joined the World Trade Organisation and became more integrated into the world economy.
China has become the world factory. Chinese workers, like other workers in the region, worked diligently to build up their well being, and trade surplus over the US, if that matters. In exchange, Americans could pay for good value-for-money, labour-intensive goods imported from China and keep the cost of living down. More and more foreign manufacturers moved or open their manufacturing facilities in China, as they all want a part of the lucrative Chinese market.
Trump has over-exaggerated the massive trade deficit with China. According to Bloomberg, the US trade deficit in goods and services with China in value-added terms in 2014 was $200 billion, not $500 billion. Take an iPhone for example, from the export value of say $180 for an iPhone 6, the Chinese factory received roughly $8 for assembling with the rest paid to component suppliers from Japan, Taiwan and Korea. Since the export value is attributed to China as a final exporter, the billions of iPhone export revenue are counted as China's surplus over the US which is a distorted figure.
Obviously Donald Trump knows what he is saying is not true, just as he knows that it is not possible to relocate a Nike sewing factory to the US and employ American seamstresses at the current wages. But in front of his voters and supporters he must find someone to blame. Chinese products are everywhere in the US, so vote for Trump and he will raise the tariff and move the manufacture of these products back to the US.
Yingwai Suchaovanich