Does the Trade Deficit with China Matter?
Economists disagree about the significance of the U.S. trade deficit with China. The U.S.-China Economic and Security Review Commission, a 12-member panel set up by Congress several years ago to report annually on our relations with China, says the burgeoning trade deficit is a matter of “long-term economic health and national security” for the U.S. Conservative economist Paul Craig Roberts, who served in the Reagan administration, predicts the trade deficit will cause a crash of the U.S. dollar before long, and warns that the U.S. will wind up having a third-world economy, supplying raw-materials to other countries, who then ship back finished goods to the U.S. Economist Larry Mishel, president of the liberal Economic Policy Institute, contends that the trade deficit with China has cost the United States more than a million jobs over the past decade. But free-traders like Washington Times columnist Bruce Bartlett argue that the U.S. can afford high trade deficits with countries like C
