China-US economic relationship is more than just trade deficit

The United States announced a new list of tariffs on Chinese products worth 200 billion US dollars. China immediately retaliated with tariffs on the same value of US goods, including soybeans and cars.

China-US economic relationship is more than just trade deficit.[File Photo: VCG]

President Donald Trump once threatened that he would hit China with additional tariffs if Beijing struck back against duties imposed on 34 billion US dollars worth of Chinese imports last week. It is happening now, but at the same time, China has vowed to retaliate dollar-for-dollar to any further US tariffs.

The trade war is escalating, and neither side is backing down. CGTN's White House Correspondent Jessica Stone said China's tariffs mainly target at agricultural goods, but a lot of Trump supporters in the United States are people whose livelihoods depend on these types of items.

Some say the tariffs are eventually going to hurt Trump voters in the heartland and impact the upcoming midterm election, but Michael Johns, the co-founder of the National Tea Party movement, did not view things that way.

"I think that shows a lack of understanding of the Trump base, which will dig in even deeper, these are people very committed to resolving this particular issue," said Johns, who believed President Trump is trying to resolve a problem which should have been tackled many years ago. 

Johns said as the US trade deficit with China has increased dramatically over the past few years, the president "wants a fair trading relationship." 

Victor Gao, the director of the China National Association of International Studies, did not think that was a wise move.The Trump administration has not only declared a trade war with China, but also shocked its traditional allies by levying tariffs on them, triggering retaliation from these countries. It seems that the United States is isolating itself from the rest of the world, and Trump’s on-again, off-again attitude has made things even more complicated.

"China now has the other countries lining up on the same side against the United States," Gao said. "I think President Donald Trump is completely miscalculated, because China and the United States, the total picture is not only trade in goods, but also trading services and American-invested companies operating in China."

Afshin Molavi, a senior fellow at the Johns Hopkins University Foreign Policy Institute, said the China-US economy is a complex issue and should not be simplified.

"The China-US economic relationship cannot be reduced to the trade deficit," Molavi said. "This is a relationship of foreign direct investment on both sides."

This relationship is also defined by 250,000 Chinese students studying in the United States and all of the money that they're spending, he added.

Gao added that the Chinese market is becoming larger and larger, and it is actually a great opportunity for the United States to reduce the trade deficit by exporting more products to China. He pointed out that what the United States is doing right now is shutting itself from the growing market, and it would be harder for them to engage in the future.

Things are really heating up, and the ongoing trade dispute between the world's largest economies shows no sign of abating. Molavi said this is not only about China and the United States – but it will also affect the rest of the world.

"These two large economies, they actually have a responsibility to the global economy to work together, to ensure the global economy is running smoothly," Molavi said.