Free trade agreement best way to reduce trade deficit with China, says former US official

Trump's excessive worry about the trade deficit with China would not be beneficial to America's economic development, and the best way to solve trade imbalance is to establish a free trade agreement, said a former US government official.

The recent announcement of imposing retaliatory tariffs on Chinese products and the launch of anti-subsidy and anti-dumping investigations into the imports of Chinese goods stemmed from Trump's deep concerns over China's unfair trade practices and the US trade deficit with China, Frank Lavin, who served as Under Secretary for International Trade at the US Department of Commerce, told Sino-US.com.

It is commonplace that the United States takes tough trade actions against China because the latter is the world's second-largest economy, which has great influence in the international economic system, said Lavin, adding that the two countries should make efforts to let each other know their concerns about the bilateral trade in order to avoid a trade war.

The United States should clearly convey its concerns about China's trade policies causing trade unfairness and what it really wants from trade with China, while China should get ready to deal with these American concerns, according to Lavin.

Bullish on the prospects of the US-China trade relations, Lavin considers the current trade tensions as offering a good opportunity for the two countries to solve their trade problems such as a trade imbalance.

In Lavin's opinion, Trump should not put too much emphasis on trade deficit because it usually has no connection with trade policies. Lavin exemplified the decline of America's steel industry in the 1950s, which he attributed to the technological advance and the world's industrial restructuring. At the same time, Lavin also suggested that the United States should hold negotiations with China to find ways to deal with China's overcapacity because the problem cannot be solved in a short time.

Threats to impose tariffs could be used as a tactic in trade negotiations, but it would increase trade barriers once it becomes a reality, said Lavin, stressing that data showed that free trade agreements were helpful in reducing trade deficit.
 


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