The United States has been taken advantage of for over 50 years by the inequity and unfairness of world trade. Nations charging large tariffs and enacting other significant trade barriers to prevent us from selling our goods abroad have resulted in a current US annual trade deficit of almost $1 Trillion ($295 Billion with China, $172 Billion with Mexico and $123 Billion with Vietnam.)
The trade deficit is unhealthy for several reasons, some of which have not really been talked about. Firstly, the wealth that other nations have accumulated due to unfair trade practices has resulted in foreigners now owning 30% of US Government debt and almost 30% of US Corporate debt. This is in addition to the farmland and real estate we always read about. In essence, we are “beholden” to foreign investors and are mortgaging our future.
Secondly, the US populace has become addicted to consuming (= buying “stuff”). Americans have accumulated so much “stuff” that self-storage is one of the fastest growing businesses in the US. This unhealthy consumption obsession has driven the US Personal Saving Rate to under 4% from 12% in the 1970’s. The United States needs to decrease consumption and increase savings; higher import prices could help achieve this.
Finally, we cannot ignore the long-term cost of allowing communist China to monopolize entire industries — like electronics, civilian drones and electric cars. Slightly higher consumer prices are worth paying today to ensure that America’s health-care system is not dependent on China in a future pandemic, and that the US military does not depend on Chinese supply chains.
The medicine may be painful, but it is absolutely necessary. As Trump said, the U.S. is a very sick patient and this is truly our last chance to “reset the table.”
April 9, 2025