Reciprocity is the key to fairness equilibrium. The entire trade issue will equalize over time.
It’s not just about fairness. We could all drop our imports and it would be “fair”. And that would destroy American industries. Because the labor costs are so much lower in China and third world countries.
It’s about protecting our industries, not being too economically dependent on other countries, and keeping ownership of US equities in American hands. One way to keep ownership of US equities in American hands is not to run large trade deficits.
>> The entire trade issue will equalize over time <<
Well no, it won’t.
As long as the US dollar is the world reserve currency, and as long as the rate of return on investment in the USA is higher than the worldwide average rate of return, foreigners will want to invest more in the USA than we invest overseas. That is, we will have an INVESTMENT SURPLUS.
And because of the way double-entry bookkeeping works for dealing with GDP and other measures of national income, the investment surplus is simply the mirror image of the so-called trade deficit. Always, always, always.
In other words, there is no rational or realistic possibility that the bogeyman “trade deficit” will disappear, as long as we have an investment surplus. The logic is inescapable.
Therefore, you may as well get used to the idea. Lean back and enjoy it!
“Reciprocity is the key to fairness equilibrium. The entire trade issue will equalize over time.”
The trick is to equalize trade before the trade deficits destroy your economy and you reach trade equilibrium because you are too broke to import anything and too broke to manufacture anything to export.