Trump again criticizes US trade deficits

US President Donald Trump continues to blame global trade for causing the loss of American jobs and the rise of US trade deficits, a view disputed by many economists and trade experts.

“We have a trade deficit with everybody,” Trump said on Tuesday before a meeting with Senate Republicans on tax reform.

He cited the $71 billion US trade deficit with Mexico and a $17 billion one with Canada, two other members of the North American Free Trade Agreement, or NAFTA.

“That’s going to be changing. It’s already changing. But it’s going to be changing fast,” he said of the deficits.

Trump did not mention the US trade deficit with China, with which the US runs the largest trade deficit. Instead, he talked about the $250 billion in trade deals he brought back from China last month.

“We went to China. We brought back over $300 billion worth of contracts from Asia. So it’s a very successful trip,” Trump said.

US Commerce Department data on Tuesday showed that the US trade deficit in October expanded 8.6 percent from September, with record imports from China, Mexico and the European Union before the holiday season. The $48.7 billion has been the highest monthly trade deficit recorded since Trump took power.

In recent years, Trump and many US politicians have been describing the US as the victim, rather than a major beneficiary, of global trade and globalization that the US had championed for decades.

Dani Rodrik, a professor of international political economy at the Kennedy School of Government at Harvard University, believes the main reason for the complaint in the US is that the gains of globalization have not been equally distributed in the US.

Slower global economic growth has translated into stagnating or falling wage growth for many US workers, according to Rodrik.

He pointed out that the groups devising and setting the rules of globalization have been large corporations, many in the US. “And they have been the big beneficiaries,” he said on Tuesday in a talk about his latest book Straight Talk on Trade: Ideas for a Sane World Economy.

“It’s really in the United States that it’s the distributional issue,” he said.

The US government, unlike those in Europe and many Asian nations, has been criticized for doing a poor job in helping people adversely affected in the globalization process.

Trump, Hillary Clinton, Bernie Sanders and Ted Cruz, the four major presidential candidates in 2016, all opposed the Trans-Pacific Partnership (TPP), a free trade agreement among 12 Pacific Rim economies.

We have a trade deficit with everybody.” US President Donald Trump

Rodrik did not believe that the TPP would help the US economy much. He described it as mainly to serve US geopolitical interests against China.

The Harvard professor noted that the inequality issue in China has also become more serious, but the rapid economic growth in China means that on the whole, everybody seems to have benefited.

Scott Miller, a trade expert at the Center for Strategic and International Studies, said on Tuesday that the US has completed the weaponization of trade politics.

“To be honest, I see this as a bipartisan achievement . ... We have this weaponized now,” he said.

There is renewed concern that the Trump administration may escalate trade confrontation with China, following the ongoing Section 301 investigation into China’s intellectual property policies and practices and the antidumping and countervailing duties imposed on Chinese aluminum foil.

On Monday, Chinese Ambassador to the US Cui Tiankai delivered a stern warning to US trade hawks.

“There are people in Washington DC who believe that economic and trade issues between our countries should be resolved through a trade war. And I want to tell them, economic and trade relations between our countries are mutually beneficial by nature,” he said.

“Cooperation will make both countries winners. And confrontation will make everybody losers,” Cui said, before a performance by the Rocky Mountain Ballet Theatre at the Chinese embassy.