U.S. is using its Japanese trade war tactic on China, says Yale economist

The moves by the United States to blame China for its economic problems has echoes of its approach to trade with Japan in the 1980s under U.S. President Ronald Reagan, according to Stephen Roach, a senior fellow at Yale University's Jackson Institute of Global Affairs.

Stephen Roach, a senior fellow at Yale University's Jackson Institute of Global Affairs. [File photo: IC]

In an opinion piece published on Monday by Project Syndicate, Roach said China has replaced Japan as an external scapegoat for America's economic woes. The United States has "found it far easier to bash others – Japan then, China now – than live within its means."

But America's economic problems are of its own making, according to Roach. He points to "America's increasingly insidious macroeconomic imbalances", primarily large current and trade account deficits caused by declining domestic savings following tax cuts under President Reagan in the 1980s and again under President Trump.