This week’s meeting between Presidents Trump and Xi provides the American president an opportunity to reset a U.S.-China trade and economic relationship that has become severely unbalanced, writes Stephen Ezell in The Hill. Over the past 15 years, the United States has accrued a $3.8 trillion goods trade deficit with China, a trade deficit that analysts estimate may have cost America as many as 3.4 million jobs. Still, it’s important that President Trump recognize that the last contest was about low- and mid-tech manufacturing, in which China competed on the basis of low cost, devalued currency, encouragement of large numbers of low-wage workers to migrate to cities, and the provision of massive subsidies. But the current and future contest revolves around which country will lead in advanced industries. Today, China seeks to move up the value chain to capture greater global share in knowledge-, technology-, and innovation-based industries. It’s for this reason that a singular focus on ameliorating the trade deficit would miss what’s really at stake now.
