There is a lot of economic talk lately (on radio and elsewhere) trying to view trade balances as a one to one relationship between two countries. That has no connection to reality, especially when your currency is one of the world’s most used for global trade.
We buy lots of cheap stuff from China with dollars. China buys relatively little from us, therefore we have a “problem”.
But the world is more complex than that. China’s dollars don’t have to be spent on American goods to balance our trade. China buys a lot of oil from the Middle East using Dollars. Those dollars are spent by Saudi Arabia to buy airplanes from Boeing. Punish China for a bilateral imbalance, they buy less oil from Saudi Arabia, Saudi Arabia cancels their plane order and it hurts Seattle and South Carolina.
Pithy and correct, Art. I’ve read that the so-called global economy was actually forged as an adjunct to Mutually Assured Destruction, tying world economies together in a way that assures fallout in one corner from that which happens in another. Whether by design or not, the world’s economy presents a complex web. As in all economies, my view is that the less governmental tampering the better for all.