US economic structure causes widening trade deficit: analyst

Source:Global Times Published: 2019/3/7 22:13:40

A container waiting to be shipped abroad is lifted by a crane at the Port of Lianyungang, East China's Jiangsu Province, on December 8, 2018. Photo: IC

The trade deficit China had with the US in 2018 set a record high, as US commerce data showed, which a Chinese expert said was caused by the US' internal economic structure and will not be easily reversed using external policy measures. 

The burgeoning trade deficit, despite US President Donald Trump's efforts to reduce it, might be used by the US as an excuse to pressure China in the ongoing trade talks, a Chinese economist said on Thursday. 

The US merchandise trade deficit with China, which represents the difference between goods exported and imported, soared to $419.2 billion in 2018, a record high, according to figures released by the US Department of Commerce on Wednesday. 

The number also showed that the US dependence on imports from China increased, not decreased, even after the tariffs that Trump imposed upon a number of Chinese products like aluminum and furniture last year. 

US imports from China increased by $34 billion to $539.5 billion in 2018, while exports from the US to China decreased by $9.6 billion to $120.3 billion. 

Overall, the US trade imbalance soared to a 10-year high of $621 billion in 2018, up $68.8 billion from 2017, the US government statistics showed. 

Li Chunding, a professor of college of economics and management under

the China Agricultural University, said that the record trade gap showed the attraction of China's exports, as well as the complementarity between China and the US. 

According to Li, the US trade deficit is a result of the country's internal economic structure and it will not be easily reversed using external policy measures.

"The US economy is led by the services industry with its advantage in innovation and research and development. It does not have a labor advantage in the manufacturing industry - that's why it has a deficit in goods trade but a surplus in services," Li told the Global Times. 

Also, the protectionist stance taken by the US has brought about market expectations for future risks, which has pushed some Chinese businesses to arrange US-bound exports ahead of schedule, Li said. 

But he warned that the widening trade deficit might become an "excuse" for the US to increase pressure on China in the ongoing trade talks. 

The two countries have engaged in rounds of trade talks recently trying to settle the trade dispute that developed last year, with each raising import tariffs on the other's goods. 

According to a report by CBS News on Wednesday, officials from both countries have signaled that they are "close to some kind of agreement."

Posted in: ECONOMY,BIZ FOCUS

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