The United States Trade Deficit Issue with China and its Economic Effects in 2016

Transcription

1 The United States Trade Deficit Issue with China and its Economic Effects in 2016 Item Type text; Electronic Thesis Authors Jiang, Yuanzhi Publisher The University of Arizona. Rights Copyright is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author. Download date 18/06/ :43:51 Link to Item

2 THE UNITED STATES TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS IN 2016 By YUANZHI JIANG A Thesis Submitted to The Honors College In Partial Fulfillment of the Bachelors degree With Honors in Economics THE UNIVERSITY OF ARIZONA M A Y Approved by: Dr. Todd C. Neumann Department of Economics

3 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 2 Abstract China and the United States are the two largest economies in the world. The United States has been the most important and influential economy for over 140 years while China is the fastest growing economy in the world. Now China is the top trade partner of the United States. However, the United States trade deficits with China have rapidly increased since China joined World Trade Organization (WTO) after In 2016 the U.S. trade deficits with China were 347 billion dollars. It is more than any other countries trade deficit. So in this paper, we will only research the trade deficits issue with China. We will discuss the reasons that cause trade deficits with China by analyzing historical data and real situation. Moreover, this paper will analyze both positive and negative economic effects to the United States.

4 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 3 Introduction China and the United States are the two largest economies in the world now, and the connection between China and the United States is hugely significant for both of them, also for the rest of other open trade countries. Beyond China and the United States, the economic issues between them are always hot issues for the world. For example, the currency disputes, a topic that is always discussed in research papers or news. It is evident to see that the influences of the largest economies are critical to the world economy. Now, the relationship between China and the United States is becoming closer than any time before. In 2016, according to the data from the United States Census Bureau, China was the first in the total trade number with billion (two ways) in 2016 while the total trade number was 7.7 billion in 1985 (U.S. Census Bureau). It grew almost 75 times than the 1985 number. Also, by the same report, China is the first import country and third export country of the United States. Moreover, China is the second country which holds the U.S. debt, which was approximately 1.05 trillion by the end of December in 2016 (U.S. Census Bureau). This data clearly points out the economic benefits relationship between China and the United States, and how close they are. However, even though the data reflects a positive situation of business trade between China and the United States, there are still some economic issues which impede the development of business communication. The United States trade deficit with China, currency disputes between the Yuan and the dollar, and intellectual property rights issues, or the foreign investment law changed in China are some examples of economic issues. Apparently, those issues existed because both China and the U.S. make decisions that benefit themselves. Therefore, this paper will analyze the major economic problem: The United Sates trade deficit with China. Also, this article will talk about the reasons and their economics effects on both China and the United States.

5 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 4 Background China and the United States are two giant economies, but they have differences in many aspects. Firstly, the state system. China has practiced socialism since 1949 with the socialist market economy (Jin, 2015). Before 1978, the economy market in China was developing slowly, as the real GDP decreased in some years. The reason for the GDP drop in China was because they were not involved in the global economy before that time. However, after the open-market economy strategy was put into effect, the real GDP of China grew positively until 2016 (NBOSC). From Appendix 1, the average annual real GDP grew about 9.5% between 1979 and After China joined the World Trade Organization in 2011, the GDP annual growth rate rose significantly, especially in 2007 when the GDP annual growth rate reached 14.2%. But because of the effects of the Great Recession in 2008, the GDP annual growth rate decreased smoothly, and China had 6.7% in However, it was still about three times more than the United States GDP annual growth rate. The Great Recession in 2008 not only affected China s GDP, but also affected China in Imports, Exports, and Foreign Direct Investment (Morrison, 2015). These numbers also declined. Moreover, under the Purchasing Power Parity, China was the largest economy in the world with 23 trillion dollars. While China has trillion dollars, and it was second in the nominal GDP ranking in 2016 (Morrison, 2017). The United States is the largest economy in the world for more than 140 years (Desjardins, 2015). In 2016 nominal GDP ranking, the United States is still the first with trillion dollars. But the United States is the second in GDP Purchasing Power Parity ranking also with trillion dollars (Morrison, 2017). Unlike China that in such high growth rate, the United States GDP has a stable average growth rate of around 2% in recent years. The U.S. dollar is the

6 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 5 most used currency in the international market, and it is also one of the world s primary store currency. The United States also has the largest financial market in the world which is New York Stock Exchange (U.S. Census Bureau). The United States is the second-largest manufacturer while China is the top manufacturer. The United Sates trade deficit with China China is the first largest trading country in the world, while the United States is the secondlargest. However, the United States has a trade deficit since 1975 (Morrison, 2017). And now the United States is the largest country with a trade deficit. For example, in 2016, the trade deficit of the United States was billion dollars. It is because the imports were 2.71 trillion dollars while the exports were only 2.21 trillion dollars (U.S. Census Bureau). From Appendix 2, U.S. Trade in Goods and Services Balance of Payments (BOP) Basis, this table shows the data of the United States trades balance in goods and services from 1960 to The United States had trade surplus in total before After 1971, the trade deficit started to increase until 1988 with a billion dollars trade deficit. Then the trade deficit reduced to its lowest point after 1971 with just billion dollars. But the United States trade deficit raised rapidly until 2006 with the highest trade deficit record billion dollars. In recent years, the United States trade deficit keep a number around 500 billion dollars. There is a point that needs to be noticed, which is even though the trade deficit in 2016 was billion dollars, that number is lower than billion dollars in It means the growth of imports is slower than the growth of exports, and it is a positive signal that the trade deficit has not intended to become larger.

7 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 6 Appendix 2 also shows another point that related to the United States trade deficit. In this stage, we need to compare the total trade number between goods and services for every year. Between 1960 and 1988, the imports and exports of services amounts were almost in the same level, but it is true that in some particular years the services trade were deficit and others were surplus. After 1988, the exports of services exceeded imports of services, and the exports of service grew faster than imports. In 2016, the services of exports were billion dollars, and the imports of services were billion dollars. It created a billion dollar trade surplus. So it points out that services are essential parts of the United States international trade because the trade deficit could be more without the gain of services traded. Besides, the trade surplus in services after 1988 is also a critical reason to explain why the trade deficit started to reduce. Another major category is goods. Before 1974, the exports of goods were more than imports of goods. However, the gap between exports and imports become larger and larger. Especially after 2000, the gap rapidly grew which means the United States demand for imports increased a lot. This increased demand for imports created a massive U.S. trade deficit. China was the top trade partner with the United States in 2016 with 15.9% of the total trade of the United States. As for the United States, the trade deficit with China took up more than 40 % of total trade deficit (U.S. Census Bureau). From Figure 1, the Five Largest U.S. Merchandise Trade Imbalances in 2016, by the end of December 2016, the United States had a trade deficit with China of billion dollars, with Japan of billion dollars, and with Germany of billion dollars. Obviously, the trade with China is the biggest issue for the United States trade deficit.

8 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 7 Figure 1. Five Largest U.S. Merchandise Trade Imbalances in 2016 ($ in billions) Figure 2. U.S. Merchandise Trade Balance with China: ($ in billions)

9 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 8 Moreover, this kind of massive trade deficit rose a lot after China joined the World Trade Organization. From Figure 2, the U.S. Merchandise Trade balance with China from , we can see in 2000, the trade deficit with China was 84 billion dollars. However, since 2002, the trade deficit has increased rapidly and reached a 266 billion dollar trade deficit in The trade deficit rose more than 300% in 6 years. Between 2000 and 2016, there is only one point at 2009 that the trade deficit was decreasing when compared with other years. The reason of this trade deficit decreasing was the Great Recession in 2008, and it had continued effects on The Great Recession let American people consume less than usual, so the demand for good also decreased in Then the imports from China deceased; therefore, the trade deficit in 2009 is the only point that dropped after Figure 2 also shows that in recent years, the trade deficit with China is in a slow growth rate, or we can say it is a kind of stable level. Compared with high growth trade deficit, and the low one will be better for the American Economy because some economists always say such massive trade deficit with China is harmful to the United States economy. Since we already know there is a massive trade deficit existing between China and the United States, it is better for us to know why this trade deficit happened. Both China and the United States are the largest manufacturers in the world, but the trade deficit existing means they have advantages in producing some specific products. Table 1 shows the major goods that the United States imported from China in This chart clearly shows the top category the United States imports from China was communication equipment which was worth billion dollars in The second type was computer equipment which was worth billion dollars. The next categories were some daily used products like apparel, footwear, and household products, and

10 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 9 they were more than 50 billion dollars. It is easy to find these primary goods that imports from China have a similar point, which is they are all consumer products. The United State has a population of approximately 320 million. This large population has a huge demand for consumer goods. Table 1. Major U.S. Merchandise Imports from China in 2016 ($millions and percentage change)

11 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 10 Table 2. Major U.S. Exports to China in 2016 ($millions and percentage change) Table 2 shows the major categories that the United States exports to China. Unlike China, the goods that the United States exports are in different sectors. The top one was the oilseeds and grains, and most of them were soybeans and this trade was worth billion dollars in The next was aerospace products (mostly are the civilian airplane) and they took up billion dollars. The third category was automobiles, and they were worth 8.94 billion dollars. The total amounts of Electronic, navigational, and medical instruments were billion dollars. Except for the top one, oilseeds and grains, more than half of above categories relate to advanced technology, like airplane and automobiles. So the goods which the United States mostly exports to China are considered high-cost goods.

12 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 11 The goods trade with China created a trade deficit for the United States. But as we mentioned before, the service trade with China generates trade surplus for the United States. Appendix 3 shows data of the United States trade in service by selected countries between 2013 and In 2013, the United States services exports with China were billion dollars while imports were billion dollars. It created a billion dollar trade surplus for the United States. In 2014, the number of services exports with China was billion dollars, and the imports from China was billion dollars. There was a billion dollar trade surplus in services. In 2015, the U.S. services exported with China was billion dollars while the imported was billion dollars, and there was a billion dollar surplus. There is a tendency that the trade surplus in U.S. services trade is slightly increasing, and it is a good signal for the United States since it makes up the trade deficit with China. From the above information, we know that the trade deficit comes from the consumer goods that the United States imports from China. But this situation still cannot be solved. In fact, the United States can produce all these consumer products which are imported from China. But the problem is the cost of producing these goods in the United States is much higher than producing them in China (Amadeo, 2017). There is no reason the United States has to pay a high price for the same product just because they want to reduce the trade deficit. This saved money can invest in producing goods so the United States can get trade surplus. But there is one question, why can China produce consumer goods at such a lower cost? There are two primary reasons: lower cost of living and currency exchange rate is sort of stable with dollars (Amadeo, 2017). In the first place, we will discuss the lower cost of living in China. The price of commodities in China is very different from the United States. Figure 3 is price comparison of some common goods

13 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 12 between China and the United States. From this graph, we can find daily consumer goods are cheaper in China than the U.S. For example, 2 liters of Coca-Cola is 1.3 dollar in the United States in 2015, but China is 44% cheaper than in New York. Another example is public transport. The public transport of China is 94% less than New York. However, we can find that for some foreign brand products, even though they are made in China, the price in China is higher than in the United States. Like an iphone 6 and Adidas shoes, their price is both higher about 40%. Therefore, for all essential consumer goods, China has a much lower price than the United States. Figure 3. China vs. United States Sources: US Census Bureau, World Bank, National Bureau of Statistics of China, People s Republic of China Ministry of Education, Deutsche Bank, China Daily.com, Enerdata, Worldometers Furthermore, the wage difference can illustrate why China has a cheaper labor cost. There are two graphs that show the average salary of a person in China and the United States. Figure 4 is China s average yearly wages from 2007 and 2016 while Figure 5 shows The United States average annual wage between 2007 and Since the 2016 census data will be released in September in 2017, let us use 2015 as an example to compare the salary differences. In 2015, a

14 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 13 person living in China s average annual salary was 62,029 Yuan, which was dollars when using 1 Yuan exchange to 0.15 dollar. The U.S. median household income in 2015 was 56,516 dollars. The average wage of the United States was six times more than China. Since there is lower cost of living in China, so these Chinese companies pay much lower wages when compared with the United States. Once the labor costs at such low level, the Chinese products price is cheaper than American making. Figure 4. China average Yearly Wages

15 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 14 Figure 5. U.S. Real Median Household Income Source: U.S. Bureau of Census The fixed currency exchange rate is also a reason that makes the United States have trade deficit with China. Unlike other currency, the Chinese currency Renminbi is not a market-based floating exchange rate. China pegs its currency Renminbi directly to the dollar (Morrison, 2017). And this currency strategy has been used since China tries to keep Renminbi from raising and stable to a level so that it will stimulate China s exports. To keep that fixed exchange rate," every day the People s Bank of China will announce the standard rate of the exchange rate between Renminbi and Dollar for buying and selling. Besides, the bank also supervises the capital inflow and outflow in China to maintain the exchange rate (Inman, 2015). Moreover, when the dollar loses value, or the United States interest rate goes up, China will buy the United States Treasuries maintain the dollar value. Therefore, the exchange rate between Renminbi and Dollar will be stable in a target range. Economic Effects Economists have a different opinion about the long-time trade deficit with China. Most of them believe that the United States long time trade deficit with China is harmful to the U.S. economy.

16 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 15 In the first place, the large and long trade deficits with China make United States lose jobs. As we all know, the large number of imports prevent creating new jobs and eliminate jobs while the large number in exports create new jobs. Therefore, now the large trade gap between China and the United States cost the United States plenty of jobs. There is no exact number of how many jobs America has lost, but some economists and organizations used a different model to calculate an approximate number of job displaced. Table 3 shows the data of the U.S.-China job displacement between 2001 and 2015, and also its relation to trade amounts by using the standard input and output model. According to Table 3, we can see in 2001, the United States total 19.2 billion dollars exports supported thousand jobs, and the billion dollars imports made the U.S. lost 1.1 million jobs, which created a total of thousand jobs displaced. However, the jobs displacement became larger in 2015 when the trade deficit increased. In 2015, the job loss was 4.4 million and the total exports created thousand jobs while the total imports let the U.S. lose 5.2 million jobs. Therefore, between 2001 and 2015, the United States lost approximately 3.44 million jobs.

17 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 16 Table 3

18 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 17 Figure 6. Figure 6 clearly reflects an increasing trend of the United States job losses since Apparently, job losses increased rapidly after But in recent years, the growth rate has become lower than before. To know the reasons, we can analyze both Figure 6 and Figure 2. From Figure 2, lately the U.S. trade deficit with China also in a lower growth rate which is the same as job displacement rate in recent years. Moreover, in 2009, the job displacement suddenly dropped; meanwhile, the trade deficit also declined due to the Great Recession. Thus we can get a conclusion that the growth rate of trade deficits directly affects the American job losses. The trade deficit with China does not give a significant influence to every American industry; it gave the most damage to particular industry. According to Appendix 4, which is a table that

19 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 18 shows the jobs created and lost by trade with China in the industry between 2001 and 2015, we can see the nonmanufacturing industry only lost 886,200 jobs. It is 25.7% of the total jobs displaced between 2001 and 2015 which was 3,443,300. However, the manufacturing sector had lost 2,557,100 jobs, which was 74.3% of total number. There were three categories under manufacturing: nondurable goods, industrial supplies, and durable goods. Nondurable goods and industrial supplies took up 11.4% and 6.8%, respectively. Durable goods were the largest part of the job displacement with 1,932,200 jobs, and it is 56.1% of total American job losses. It is consistent with what we mentioned above that the United States had the largest trade deficit with China in consumer goods. The high imports from China in those durable goods cost the United States available jobs in manufacturing products. The reason that pushes the United States to import these goods from China is the price competition between China and an American companies, and American companies cannot offer a lower price when competing with Chinese Companies. When these American companies lost their market share, it has weakened the American manufacturing sector (Morrison, 2017). Once the American manufacturing sector is shrinking in producing particular goods, then it will be hard to recovery. The United States has to rely on imports from China, and it will not reduce the trade deficit with China. Besides, to reduce the cost, many American companies have to outsource their jobs to China. This action cuts down the available jobs for American workers, and it will raise the unemployment rate (Amadeo, 2017). In 2014, the National Bureau of Economic Research did a study that claims the United States lost about 2.2 to 2.4 million jobs in the manufacturing sector from 1999 to It counted as a 10% decrease in the entire American manufacturing industry jobs during that time (Morrison, 2017). There is tremendous damage in the American manufacturing business.

20 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 19 In addition, the United States trade deficit with China also had various economic effects in all 51 states. Appendix 5 tells the ranking of all states jobs displaced between 2001 and We can see the top five states with jobs displaced are Oregon (65,400 jobs displaced), California (589,100 jobs displaced), New Hampshire (24,000 jobs displaced), Minnesota (89,100 jobs displaced), and North Carolina (131,100 jobs displaced). These lost jobs took an average of 3.5% of each state employment. When we look at the top ten states, we can find a similar point that most of those states which were profoundly affected by trade deficit with China are all states with a high technology industry. Like California, Oregon, Texas, and Minnesota. Also, states that related to manufacturing sector lost plenty of jobs as well, and they are considered as second level states, such as North Carolina, New Hampshire, and traditional manufacturing states like Indiana and Kentucky. These manufacturing-related states have lost an average 2.6% of total jobs by the effects of the trade deficit with China. The trade deficit also has effects on American workers wage. According to Robert E. Scott, those 2.7 million American workers who lost jobs between 2001 and 2011, had to find a new job with dollars per week in the nontraded industry to replace their original jobs in manufacturing with 1, dollars every week. The worse situation is many of those workers cannot find new jobs and remain unemployed. This situation counted as a 22.6% decrease in weekly wage for those related workers. And in total amount, the American workers had to face a net wage loss of 37 billion dollars every year under the effects of trade deficits with China (Scott, 2013). Furthermore, the Josh Bivens claims that increasing imports from low-wage countries makes American workers who do not have a college degree get less wages. For example, in 2011, the trade deficit with a low wage country lowers American s full-time and non-college

21 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 20 workers annual salary by 5%, approximately 1800 dollars (Bivens, 2008). Furthermore, Bivens also points out the increasing trade deficit with a low wage country increased the wage gap between college and non-college workers. And China as the largest trade deficit country supports 56.8% percent of total increased wage gap between 1995 and 2011(Bivens, 2008). The last adverse effect is the long-term trade deficit will push China to buy more United States Treasury bonds. Now China is the second-largest debt holder of the United States with trillion dollars (U.S. Census Bureau). If China continued to buy U.S. debt, many people say the American economy will depend on China more than ever, and it is even bad for negotiating in the future. However, some economists believe the United States trade deficit with China is overstated, and the trade deficits also have positive effects on the United States economy. The imports goods from China benefits Americans because people can buy those products at a much lower price.

22 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 21 Figure 7. China-produced content lowers consumer prices From Figure 7, we can see those goods which were imported from China has made prices continue to drop since In other words, American households need to pay much more for the same products if the U.S. was without imports from China. For example, the average household income was 56,516 dollars in 2015, and the Oxford Economics estimated U.S. trade with China saves every family about 850 dollars. Besides, the lower price of imported goods will lower the inflation in the American economy (Amadeo, 2017). And the high demand for imports will keep a competitive market, so the American consumers have more options to choose from. Then import from China will increase the consumer welfare.

23 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 22 Figure 8. Growth in US Gross Value-Added has come in areas where Chinese imports have grown Source: Oxford Economics/ Bureau of Labour Statistics Also, even though the United States lost jobs in the specific industry when trading with China, the United States still sells high-value products to China like vehicles and high technology equipment, and they support jobs for American workers. The United States exports to China created a total 1.8 million new jobs and contributed 165 billion dollars in GDP in 2015 (Oxford Economics). Besides, the United States still has a trade surplus on financial services trade and export business. The Oxford Economics predicts the United States exports to China will exceed 520 billion dollars by Furthermore, trade with China also stimulates many American

24 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 23 sectors growth. Figure 8 shows that many American manufacturing industries had rapid growth when they imported significant amounts from China. Especially in the high-tech sector, such as the computer, transportation equipment, and machinery sectors. The United States can meet the demand of the foreign market so that these sectors can improve in productivity. These imports help them be innovative and competitive. It is true that China is the second-largest holder of U.S. debt, but China will not use the debt as leverage to harm the American economy. The more debt China holds, the closer connection there is between China and the United States. China will support the United States avoiding the recession because they know once it happens, it will also bring enormous damage to the Chinese economy as well. Conclusion The United States trade deficit with China have been increasing in recent years. Because China has a lower cost of living and a stable exchange rate with dollars, the United States has to import more consumer goods from China to satisfy its domestic demand. Besides, the lower labor cost in China makes American companies have to outsource jobs, and it directly decreased the jobs in the United States, or each state. In addition, American manufacturing workers loses wages because of trade deficit with China. However, the previous data shows the United States does not have trade deficit in every sector. The United States has trade surplus on its services trade with most business partners. Also, the United States has a trade surplus with its advanced technology products. These are all good signals for the American economy because the United States can put more money into specific commodities. There is no doubt that the trade deficit with China is harmful to the American economy, but in fact, there are still benefits as well. Trade deficit with China Push the United States increasing in its productivity in many sectors. Also, this huge

25 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 24 amount trade let American have more options to choose in market, and even save their money. The trade deficit with China will push China to buy U.S. debt so that to keep the United States interest rate low. These are all good effects U.S. trading with China brings to the American economy. In the long term, as long as China has a lower cost of producing consumer goods, the United States still needs to import from China. This situation is difficult to change since the American workers wage is much higher than Chinese workers. The United States will still try to solve the trade deficits issues with China in the future. It is better to try to raise Renminbi's market value instead of imposing heavy duties on import goods from China. The reason is duties on goods finally will be paid by American consumers, it could increase the inflation, and there is no need to pay such a high price. Thus, raising Renminbi s value will have fewer effects on American economy, which make it as an optimal option. However, as for the United States, the negotiation with China will be very difficult because China definitely will not suffer such massive loss by raising Renminbi s value.

26 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 25 Appendix 1 References Appendix 2

27 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 26 Appendix 3

28 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 27

29 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 28 Appendix 4

30 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 29 Appendix 5

31 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 30

32 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 31

33 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 32 Kimberly, Amadeo. Why Is America s Trade Deficit with China So High?. The Balance, 07 Feb 2017, Accessed on 15 Feb Kimberly, Amadeo. U.S. Trade Deficit: Causes, Effects, Trade Partners. The Balance, 15 Feb 2017, Accessed on 15 Feb Wayne M. Morrison. China-U.S. Trade Issues. Congressional Research Service, February , Accessed on 15 Feb Kimberly, Amadeo. U.S. Trade Deficit by Country: Current Statistics and Issues. The Balance, 21 Feb 2017, Accessed on 15 Feb U.S. Census Bureau, Economic Indicator Division. U.S. Trade in Goods and Services Balance of Payment (BOP) Basis. U.S. Census Bureau, 7 Feb 2017, Accessed on 15 Feb U.S. Census Bureau, Trade in Goods with China. U.S. Department of Commerce, Accessed on 15 Feb U.S. Bureau Census, U.S. International Trade in Goods and Services December U.S. Department of Commerce, 7 Feb 2017, Release/current_press_release/ft900.pdf. Accessed on 15 Feb Phillip Inman, Why has China devalued its currency and what impact it will have?. The Guardian,11 Aug 2015, Accessed on 15 Feb 2017.

34 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 33 Trading Economics, China Average Yearly Wages." Trading Economics, Accessed on 15 Feb Department of Numbers, US Household Income." Department of Numbers, Accessed on 15 Feb Jeff Desjardins, China vs. United States: A Tale of Two Economies, Visual Capitalist, 15 Oct 2015, Accessed on 15 Feb Jin. Difference between China Economy and American Economy." Research Pedia, 2 Sep 2015, Accessed on 15 Feb Wayne M. Morrison. China s Economic Rise: History, Trends, Challenges, and Implications for the United States," Congressional Research Service, 21 Oct 2015, Accessed on 15 Feb Robert E. Scott. Growth in U.S.-China trade deficit between 2001 and 2015 cost 3.4 million jobs, Economic Policy Institute, 31 January 2017, Accessed on 5 March Oxford Economics. Understanding the US-China Trade Relationship, Oxford Economics, January 2017, d%20china%20trade%20report.pdf. Accessed on 5 March Josh Bivens. Using standard models to benchmark the costs of globalization for American workers without a college degree, Economic Policy Institute, 22 March 2013,

35 U.S. TRADE DEFICIT ISSUE WITH CHINA AND ITS ECONOMIC EFFECTS 34 Accessed on 5 March 2017.