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USA Trading Partners

Keith Tucker


Guest Columnist

Does our trade with China help fund their military build-up? On average, lower-cost goods from China saves a household here $850 a year. So, if we bought all those same goods from elsewhere or made them here, would it make a difference? The answer is no because our contribution to the overall Chinese GDP is not large enough to influence their decisions.

A bigger issue is this. There are some products we do not make and are not readily available elsewhere.  Factories just don’t spring up overnight. If we went cold turkey from buying from China, there would be shortages of staple goods. On average, we are spending about $750 billion a year in military spending. This is about 3 percent of our GDP. China is spending about a third of that or about 2 percent of GDP. But they get more bang for their buck because things cost them less to make.

In 2000, China had a GDP of one-tenth of the USA. Last year it was 70 percent. We buy from all foreign sources, about $2.3 trillion in goods, and sell about $1.5 trillion every year. Hence a trade deficit. China, Canada, Mexico, ASEAN, and the EU is over 90 percent of all trade. So, who is ASEAN you ask? (Association of Southeast Asian Nations) It is comprised of 11 countries, including Vietnam, Cambodia, Philippines, Indonesia.

This partnership gives them each more clout. One interesting bit of information that came up while researching this was the worldwide submarine fleet. There are about 450 boats, spread over 45 countries. The term for a submarine is a boat, not a ship. There are several countries with two that one would have never thought about. If you want to see the whole list, just Google the world-wide submarine fleet. North Korea has 60; China has 63 and we have 73. Japan has the latest new technology non-nuclear submarines with lithium batteries – the first of its kind. We strongly support Japanese military spending because they will be on our side in any conflict. Who would have thought that?

We have good reason to be concerned about a more robust Chinese military. It appears they are playing the long game about their ambitions to be a global leader. Other than maintaining a technology lead on them, there’s not much else we can do. Just remember they are building mock-up replicates of our aircraft carriers to practice shooting at.

Editor’s note: Keith Tucker is a Greenfield resident and owner of The Marble Shop.

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