Question

What is the reason for president trump will not join other countries to put legal pressure on china ? why does he threaten americas allies?

*no response cited from a book or webpages, just thoughts? Thank you

Answer 1

United States needs to produce more steel and aluminum for its defense sector. The world's crude steel production was 1,691.2 million tonnes (Mt). The biggest steel producing country is currently China, which accounted for 49.2% of world steel production in 2017.

The U.S. trade deficit with China was $375 billion in 2017. The trade deficit exists because U.S. exports to China were only $130 billion while imports from China were $506 billion.

The United States imports consumer electronics, clothing and machinery from China. A lot of the imports are from U.S. manufacturers that send raw materials to China for low-cost assembly. Once shipped back to the United States, they are considered imports.

Causes of the Trade Deficit:

China can produce many consumer goods for lower costs than other countries can. Americans of course want these goods for the lowest prices. How does China keep prices so low? Most economists agree that China's competitive pricing is a result of two factors:

1. A lower standard of living, which allows companies in China to pay lower wages to workers.
2. An exchange rate that is partially fixed to the dollar.

That means many American companies can't compete with China's low costs. As a result, U.S. manufacturing jobs are lost. From time to time, legislators try to impose tariffs or other forms of trade protectionism against China to bring jobs back.

If the United States implemented trade protectionism, U.S. consumers would have to pay high prices for their "Made in America" goods. That's why it's unlikely that the trade deficit will change. Most people would rather pay as little as possible for computers, electronics and clothing, even if it means other Americans lose their jobs.

China is the world's largest economy. It also has the world's biggest population. That means it must divide its production between almost 1.4 billion residents. A common way to measure standard of living is gross domestic product per capita. In 2017, China’s GDP per capita was $16,600. China's leaders are desperately trying to get the economy to grow faster to raise the country’s living standards.

They remember Mao's Cultural Revolution all too well. They know that the Chinese people won't accept a lower standard of living forever.

How It Affects the U.S. Economy

China must buy so many U.S. Treasury notes that it is the largest lender to the U.S. government. Japan is the second largest. As of January 2018, the U.S. debt to China was $1.17 trillion. That's 19 percent of the total public debt owned by foreign countries. Many are concerned that this gives China political leverage over U.S. fiscal policy. They worry about what would happen if it threatened to call in its loan.

By buying Treasurys, China helped keep U.S. interest rates low. That helped fuel the U.S.housing boom, which lead to the subprime mortgage crisis. If China were to stop buying Treasurys, interest rates would rise. That could throw the United States and the world into recession. But this wouldn’t be in China's best interests, as U.S. shoppers would buy fewer Chinese exports. In fact, China is buying almost as many Treasurys as ever.

U.S. companies that can't compete with cheap Chinese goods must either lower their costs or go out of business. Many businesses reduce their costs by outsourcing jobs to China or India, which adds to U.S. unemployment. Other industries have just dried up. U.S. manufacturing, as measured by the number of jobs, declined 34 percent between 1998 and 2010. As these industries declined, so has U.S. competitiveness in the global marketplace.

The above explaination shows that the US economical growth and development is more depend on China whereas other countries are less dependant on China compared US. If Trump join other countries to put legal pressure on china it will further worsen their Trade war and long term business relationship with China which will major impact on US economy and unemployment rate will increase. Because of the above stated reasons he theaten americas allies as well.