US President Donald J. Trump and China President Xi Jinping tonight?
Will the trade dispute be the focus of their talk? Hold it or stop it? The question is who shall benefit from this on-going trade war. China's stand has been very clear that nobody can win it. However, the US view is obscured, except for raising more confusion. Obviously, people in both the US and China do not get anything from this conflict, although they cannot tell why it is.
Well, let's make it clear here.
As the largest consuming country, the US has imported tons of goods to meet its market need, but does not export adequate stuff to balance its trading with other countries, including China, Japan, Germany and South Korea. Consequently, the US has had enormous trade deficits for many years. The deep reason needs dug up. Why is it so? Every American is required to think about it.
As the largest goods producer, China has produced over 50% goods for the people daily living needs with less than 20% population of the world. China has exported goods worth $500 billions per year to the US, and is able to only import $200 billions of goods and service from the US, resulting in $300 billions trading surplus. However, such a huge amount of money cannot be used for buying more high-tech goods from the US because of its export restriction. China has to use these US dollars to buy the US treasury bonds, cumulating over 1.2 trillions so far.
Is there a solution to this problem facing the US and China? The answer is positive as listed below.
1. China reduces exporting goods to the US till the point equal to importing.
2. The US exports more goods to China till the point equal to importing.
3. Both countries completely stop trading. Before doing so, China has to use up the US bonds by importing goods from the US if it has stuff for sale.
4. Shut down the door to outside of the world.
5. ???
These will be touched by the Presidents at the meeting while enjoying the Argentina meal tonight. It is tough for them though. Optimistically, they may reach a compromising point - easing the tension now and letting a bargain next year.