Wednesday, December 14, 2011

China: One of Our Best Export Customers

Exports to China have doubled over the last 5 years (compared to a 37% gain for all exports since 2006)

From Cato's Dan Griswold:

"China remains a bright spot in U.S. trade, despite the complaints of politicians in Washington. U.S. exports to China continue to grow more rapidly than exports to the rest of the world. Since China joined the World Trade Organization 10 years ago this month, U.S. exports of goods to China have grown five-fold, while they have not quite doubled to the rest of the world.

China is the only major market where U.S. exports have consistently grown above the 15 percent annual rate needed to double every five years. The compound growth rate of U.S. goods exports to China since its entry into the WTO has been 18.1 percent, compared to 6.8 percent to the rest of the world. China is now the third largest foreign market for U.S. goods. Yet a large contingent in Congress wants to slap tariffs on Chinese imports because of its currency practices that supposedly hinder U.S. exports.

In the business world, picking a needless trade fight with one of your best customers would be the height of folly. For many members of Congress, it has become an urgent item on their legislative agenda."

HT: Don Boudreaux

15 Comments:

At 12/14/2011 9:42 AM, Blogger rjs said...

best how?

 
At 12/14/2011 10:55 AM, Blogger Ironman said...

See here for a chart showing the growth of U.S. exports to China since January 1985 (and also the U.S.' imports from China!)

Then see here, as the value of China's exports to the U.S. have hit an all-time high, while the U.S.' exports to China are likely on track to do so by the end of the year. That the year-over-year growth rate of trade between both nations are nearing recessionary levels is also discussed....

 
At 12/14/2011 10:56 AM, Blogger Buddy R Pacifico said...

There are 228 countries on planet Earth. The U.S. has Free Trade Agreements with sixteen of them and about to be seventeen (Korea).

The current sixteen Free Trade Agreement countries make up 9% of world GDP, but 41% of U.S. Exports in 2010. The U.S. had trade surpluses with twelve of the sixteen in 2010.

How did trade the trade deficit with China do for 2010 vs. 2009? It grew from $200 billion to $278 billion in 2010.

Grow Free Trade Agreements dramatically and U.S. Export gains should also be dramatic.

I support a market for the Chinese yuan, but the emphasis on currency manipulation should be down the list of problems, that the U.S. must work out with China very soon.

 
At 12/14/2011 11:40 AM, Blogger rjs said...

whoops...

China will levy anti-dumping and anti-subsidy duties on certain US vehicle imports, the commerce ministry said Wednesday, a move likely to fuel tensions between the world's two biggest economies.
The tariffs will be applied for two years to passenger cars and sports utility vehicles with engine capacities of 2.5 litres or more and will take effect Thursday, the ministry said in a statement.
The decision will affect vehicles produced by General Motors, Chrysler Group, BMW Manufacturing, Mercedes-Benz US International, American Honda Motor and Ford Motor.
The move is likely to further strain ties between Beijing and Washington, which have recently locked horns over solar panels, chickens and the value of the Chinese currency.
China said the investigation into US auto imports found domestic vehicle manufacturers had "suffered substantial damages" due to the dumping and subsidies.
The anti-dumping penalties range from 2.0 percent to 21.5 percent while the anti-subsidy tariffs will be set at a maximum 12.9 percent, the ministry said.

http://www.google.com/hostednews/afp/article/ALeqM5illDQs8-jfqM7ERqTsv3s4rfIQZg?docId=CNG.f5463f39becc9822be974eff8f18854e.131

 
At 12/14/2011 11:40 AM, Blogger sethstorm said...

Adding China to the WTO was a mistake.

Letting commerce get in the way of punishing China is a greater mistake. If anything, it should serve to focus even more closely on China given the attempts to dissuade anyone from acting against that country.

It is like arguing in favor of the acceptance of blood money for it being money. If anything, China should lose so much face that there is only well-scratched bone left when the US is done.

 
At 12/14/2011 11:42 AM, Blogger sethstorm said...


The tariffs will be applied for two years to passenger cars and sports utility vehicles with engine capacities of 2.5 litres or more and will take effect Thursday, the ministry said in a statement.

More large cars for us United States citizens, which is good.

 
At 12/14/2011 1:06 PM, Blogger VangelV said...

There are 228 countries on planet Earth. The U.S. has Free Trade Agreements with sixteen of them and about to be seventeen (Korea).

It is not really 'free trade' if you have thousands of regulations and hundreds of duties.

 
At 12/14/2011 2:25 PM, Blogger Ron H. said...

rjs: " whoops...

China will levy anti-dumping and anti-subsidy duties on certain US vehicle imports,...
"

Apparently the Chinese central planners have learned nothing from the mistakes of others.

 
At 12/14/2011 2:25 PM, Blogger truth or consequences said...

Is Sethstorm for real?

punisning china??? for what?.. being a nation that is evolving into a different/better place?

Old Seth probably thinks the US should treat China the same way it "dealt" with Cuba fifty years ago? Didn't that work well?...LOL

"Dinosaur thinking"...a product of watching too many John Wayne movies

 
At 12/14/2011 2:43 PM, Blogger Ron H. said...

Buddy: "The current sixteen Free Trade Agreement countries make up 9% of world GDP, but 41% of U.S. Exports in 2010. The U.S. had trade surpluses with twelve of the sixteen in 2010."

Do you suppose the US sought FTAs with these 16 (17) because there was a large volume of trade already, or are you suggesting that the agreements caused the large volume of trade?

The F in FTA is, of course, an oxymoron, as actual free trade wouldn't include a government level agreement.

 
At 12/14/2011 2:45 PM, Blogger Ron H. said...

T or C: "Is Sethstorm for real?"

Yup.

It only gets worse.

 
At 12/14/2011 5:51 PM, Blogger sethstorm said...


truth or consequences said...

When it affects the US in a negative way economically, the last thing the US should be doing is appeasing China - by ignoring problems just because of the volume of business we (unfortunately) do with them.

 
At 12/15/2011 7:51 AM, Blogger juandos said...

"Letting commerce get in the way of punishing China is a greater mistake"...

WTF?!?! Punishing China for what?!?!

BTW China apparently is doing a good job of punishing itself...

 
At 12/15/2011 9:49 AM, Blogger ws4whgfb said...

I think people are against the trade deficit because they don't understand where money comes from. They think there are a finite number of dollars and if we give too many dollars to china we won't have enough here in the US. This is a mistake.

The monetary system is not a zero sum game. Banks create money when they lend it. They can lend out more money than they have in deposits. This creates money.

If I buy something from china and add value to it, that increases the money supply in the US because I can borrow money on the value I added.

If I borrow $100 to buy widgets from china and I convert them to super-cogs worth $1000, I can then borrow $900 from the bank. Where did that $900 come from? The bank could create that money because I created value when I made super-cogs. I can then use the $900 to pay my employees and pay the bank back as I sell my super-cogs. In this way $900 is added to the economy here in the US even though I sent $100 to china.

 
At 12/15/2011 2:45 PM, Blogger truth or consequences said...

more dinosaur thinking from Sethstorm:

"When it affects the US in a negative way economically, the last thing the US should be doing is appeasing China"

Who decides that it's negative?

The US was the dominant manufacturing economy of the 20th century. England was the same for the 19th century. England ain't doing too bad now, is it?

China is often accused of being a commy, central planned economy...yet your post suggests that the US should take action against all things Chinese. Ain't that central planning?

Quit wasting time trying to keep the US buggywhip factories working...figure out where the opportunities are NOW and tomorrow.

Quit watching John Wayne movies.

 

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