What we import from China
AEIdeas
The first year of the Trump presidency saw a record US merchandise trade deficit with China, $375 billion. Exports were the most ever. Unfortunately for the president, so were imports, breaking $500 billion. Even in Washington, half-a-trillion is real money, especially if it will be followed by more of the same.
What is the US buying? One of the many annoying things about trade is all the ways there are to slice up the numbers. Using “3-digit SITC,” because it rolls so trippingly off the tongue, here are the top 10 goods imports from China last year:
This is over half of all imports. Banning a product not on this list — not slapping with high tariffs, banning outright — would cut the trade deficit only 3% or less.
Steel, for example, gets a lot of attention. Combined 2017 steel and aluminum products from China were worth barely half as much as radios. Getting rid of them entirely would leave the bilateral trade deficit at $370 billion, still a record. Solar panels, which have already been hit with tariffs, are so unimportant they don’t even have a category.
So steel and solar don’t matter at all to the trade deficit. Nor does it help to talk about how China should buy more US exports. The last five years of exports to China read $122 billion, $126 billion, $116 billion, $116 billion again, and $130 billion last year. This year isn’t suddenly going to see $250 billion. If we’re lucky, it will see $150 billion.
That probably won’t keep up with 2018 imports. The Republican tax plan is bad for national debt but should put more money in people’s pockets. More money means more spending, including on imports. A rise in US exports to China to $150 billion would be 15%. A 15% rise in imports from China would be $75 billion, meaning a $430 billion deficit this year.
It would be perfectly reasonable for the president to say, “If Americans are buying more things made in China because they have more money, there’s no problem.” A lot of people would agree with that, for good reasons.
But he can’t keep saying China is ripping us off and he’s going to stop it unless the US targets the biggest imports. The trade deficit with China is bigger than with the next eight countries combined. NAFTA? The trade deficit in cell phones and computers alone with China is bigger than the trade deficits for all goods with Mexico and Canada combined.
There are of course drawbacks to restricting cell phone, computer, and toy imports — people will have to pay more for those things. Unlike steel, exporting those goods is truly important to China and they can retaliate against US soybeans, for example. Eggs have to get broken before the omelette gets made.
Until then, until the main Chinese exports are addressed, “trade war” talk is much ado about nothing. For better or worse, until the Trump administration targets China-made cell phones, computers, toys, furniture, and clothing, US trade numbers will look pretty much the same.
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Death by Walmart.
Death by Amazon, not Walmart. Amazon after opening China to US, has resulted collectively in theft of Billions to small American businesses. Especially intellectual property of small mom & pop companies, which Walmart respects when they do business. Walmart has logistics experience Amazon can only dream of!
Over 5000 stores just in US in the US with years of experience. Walmart has high end shopping experience in its Chinese operations selling high ticket items like $25,000USD champagne. Only things besides a good website, are a fleet of uniformed workers in clean clothes and vans to deliver the last 5-10 miles.
There is no reason ANY particle board and laminate, and fine American furniture should be made it China. Only exception would be furniture which is less popular in the US, like my Rosewood formal Chinese furniture. CNC machines have been around a long time, few employees needed. One programmer, several operators, lumpers, and assemblers.
Looking at construction, neither is there any reason home office chairs should be made there either, except for the wheels, seat mounts and, height cylinders . I have a Binkman propane barbecue, where only the low skill manufacture control pieces are from China, but otherwise US built.
Japanese have sent parts to US to assemble TVs, refrigerators, stoves, and other durable consumer goods for a log time. Same for cars, which today, many Honda’s products have higher US part and labor content than the Big 2 + Fiat’s trucks and Jeeps. Any Chinese company should be required to do the same, with same rules and conditions imposed on US manufactures in China.
One of the world’s best precision sheet metal production companies in California, US Steel – Pohung Company, made some of the finest sheet metal for automobiles in the world is in mothballs because of Chinese DUMPING.
My Only Chinese shoes are Reebok work boots I. The reason I bought them is when new they don’t cause blisters on my feet for a month to break-in, like US made Red Wings. The difference in cost wasn’t the issue, it was my feet. The Chinese Reebok’s were almost $300. If Red Wing offered the same boots for $400,I would have paid the difference.
My casual and dress shoes are from Italy, India, and US. My tennis shoes from Indonesia, and Vietnam. Other than industrial work boots, I would never buy Chinese footwear because of poor quality.
With FoxCon and Pegatron to open new plants in the US, with computer automated equipment, there will be argument to build computer motherboards, gaming consoles, and cellphones in the US for internal consumption. It’s likely any increase in cost will be minimal.
Other than design staff, most will be best suited to flyover country where people can have lower paying jobs and still live a good life. Most of these jobs though much better than in China won’t be pleasant. There will be mandatory overtime for new product roll out, and and shift work. For almost 50 years Levis supplied a decent life for thousands of employers willing to do much harder work. I’m certain there will be many willing takers when jobs become available.