U.S. President Donald Trump answered questions from reporters regarding the economic and trade talks between China and the United States today (May 8th) at the White House.
Reporter: "What results do you hope to achieve in the talks between China and the U.S. in Switzerland?"
Trump: "We will wait and see. We used to lose one trillion dollars a year, but now we don't lose anything at all. That's how I look at it."
Comment: Trump's logic is very laughable! It is true that the U.S. has long been experiencing a trade deficit, but simply defining it as a "loss" is a fallacy. American consumers benefit from the large amount of imported goods that are both good quality and affordable, maintaining lower inflation levels and higher living standards. American companies also gain huge profits through global supply chains. For example, Apple Inc. purchases components globally for assembly, utilizing the comparative advantages of different countries, creating enormous commercial value.
Trump may think that there is no loss now because after imposing tariffs, imports have decreased, and the trade deficit seems to have narrowed. But this approach is shortsighted. Trade is mutual; if the U.S. reduces imports from China, China will also reduce imports from the U.S., and export industries in the U.S. will suffer a blow as well. The vitality and global competitiveness of the U.S. economy will also decline as a result.
It needs to be emphasized that these talks were requested by the U.S., yet Trump still insists on his stance. If the U.S. continues with this wrong understanding during this round of economic and trade talks, does not respect international trade rules, and does not seek mutual benefit and win-win outcomes, the talks may fail to produce substantial results.
Original Source: https://www.toutiao.com/article/1831516481122372/
Disclaimer: This article solely represents the author's personal views.