, MAY 17, 2019
Whether President Trump is misguided in pursuing tariffs and using them as leverage with the Chinese government, America’s continued drive to levy penalties is less about fixing a trade problem than about changing China’s investment rules.
Last Friday, the White House raised the tariffs on up to 25 percent. On Monday, China retaliated with tariffs of its own. The trade war is now full-on — except that it’s not really about trade.
China does account for the largest share of America’s trade deficit. But that bilateral trade deficits are a problem in themselves — they’re just a symptom of other issues (if even that). “The overall United States global trade imbalance is the result of economic conditions in the United States — the excess of investment over savings,” Martin Feldstein, a former chairman of the Council of Economic Advisers, , adding that if America’s trade imbalance with China were eliminated, it would simply shift to other countries.........
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