The US-China Business Council (USCBC) has submitted its views on the US trade deficit with China to Secretary of Commerce Wilbur Ross, in response to the Department of Commerce’s request for comments on its investigation into the United States’ significant trade deficits Senior vice president Erin Ennis released the following statement:
“China is a $400 billion-market for the American economy. Goods and services that American companies sell to China support jobs and commercial activity across the United States. China is also a significant investor in the United States, with more than $100 billion in direct investment last year. Taken together, China is a strong contributor to US economic and job growth, contributing to roughly 2.6 million US jobs and $216 billion to US GDP.
“While the bilateral trade deficit with China is significant and must be reduced, it also needs to be viewed in context. First, the share of the US global trade deficit held by East Asia (including China) is almost exactly the same now as it was twenty years ago, before China’s WTO entry. Though China is frequently cited as the source of the United States’ largest bilateral trade deficit, value-added calculations of the trade deficit, pioneered by the WTO and the Organization for Economic Cooperation and Development (OECD), indicate that a significant portion of our imports from China originate elsewhere. If the US trade deficit were calculated on a value-added basis, it would decrease by about 40 percent, putting at about the same level as our trade deficit with the European Union, according to a recent study by Oxford Economics.
“USCBC looks forward to working with the Trump administration to effectively address trade issues with China through the new Comprehensive Economic Dialogue. To be effective, a comprehensive approach is necessary, addressing China’s tariffs and consumption taxes; licensing and other non-tariff barriers, and prioritizes the completion of a high-standard bilateral investment treaty to create a more level playing field for American companies that seek to access the Chinese market.”