Sunday the White House released a statement about the notorious trade war going on with China. Saying “China will significantly boost the buying of US goods”. It seems from this that China is cracking under the pressure Pres. Trump put on them from tariff threats on Chinese goods especially steel if a deal could not be reached to reduce the trade deficit. Much to the dismay of most of his fellow party members.
By China doing this Pres. Trump is already starting to reduce the over $335 billion annual trade deficit with China. Which many of his predecessors were not only unable to reduce it but increased it under their administrations.
This comes after some very intense threats of tariffs from the United States and retaliatory tariff threats from China. It was obvious that the Chinese rely far more on the United States than vice versa, but the Chinese were banking on the fact that democracies like the United States cannot handle short-term pain. By that, I mean Democratic politicians are heavily reliant on pleasing people in the short term in order to maintain their position.
Renegotiating trade with China is not only good for America it is entirely necessary. The American dollar only holds it’s high value because it is the reserve currency trade around the world and is the official currency used in any international oil transactions, making it the Petrodollar, although a few countries are starting to change that norm such as China trying to use their own currency when trading oil with Saudi Arabia. Because of the instability of the American dollar inflation and debt countries are starting to use other currencies for trading and this is critical to America. Because America’s currency would become worthless if it were not the reserve currency of trade around the world.
So it is entirely necessary that we increase production in the country so that if the dollar ever did fall from being the reserve currency of trade we could try to maintain the value of the dollar based on the production of goods within the country. But as of right now production in the US is far below what would be necessary to maintain any relevant value for the currency in the world. That is because most of the goods consumed by America are imported from around the world especially China. So there are two options to rectify this, either international countries have to buy American goods which they will not want to do unless we buy their own goods, or we tariff goods brought into the country forcing more companies to move production back to the US rather than these other countries where they don’t have to follow any regulations.
But the reason why we saw such bipartisan disapproval by career politicians in DC was that they are all funded, regardless of party, by these corporations who greatly benefit from the current trade dichotomy with China. And because of that you saw agreement from both sides of the aisle against the president on this despite this action greatly benefiting the American people.
Although yes some factories in the US will lay off employees as a result of higher tariffs on goods like steel. But the overall net effect from the jobs created from the production of goods like steel in the US will far outway the loss. And the politicians know this, they just use these small short-term dips in jobs to scare voters into willingly doing the bidding of their corporate overlords. Despite the fact that more jobs will be created they just don’t ever mention that side.
But China in retaliation has threatened to tariff goods produced from farmers and other blue-collar middle American factories to hit Pres. Trump where most of his supporters are in an effort to put more pressure on him. This comes back to China’s understanding of American politics and democracy in using it against them. But much to his credit Pres. Trump stayed strong and realized the long-term goals, and it appears he will be getting what he wants from China which is to reduce the trade deficit with China. Giving America a much more secure position in the economic world.