Post Brexit Britain needs to take notice of the comments and sub-text of Donald Trump and his administration about trade between friends and rivals. Mr Trump is engaged on a 12-day Asian tour and has visited close ally Japan and China a nation with which relations could be regarded as less cordial.
Whilst visiting Japan, the US President commented that the US had: "suffered massive trade deficits at the hands of Japan for many, many years", adding: "We want free and reciprocal trade but right now our trade with Japan is not free and it's not reciprocal and I know it will be and we've started the process".
Mr Trump called on Japan to build more cars in the USA (instead of shipping additional capacity from Japan to augment domestic production) whilst simultaneously “praising” Japan for buying US military hardware (produced in the USA, presumably!). "Try building your cars in the United States instead of shipping them over. That's not too much to ask. Is that rude to ask"? Currently, three-quarters of “Japanese” cars sold in the USA are produced in America.
The US Treasury Department estimates the trade deficit with Japan at $69 billion for 2016 whereas China accounts for a trade imbalance with the US of $310 billion.
Many China watchers have long observed that China gains an economic advantage by locking its currency closely to the US Dollar and that the Yuan is significantly undervalued. However, an official finding to this effect would launch mandated sanctions against China as a “currency manipulator” and so officials have always been at pains to avoid this. Nevertheless, it is extremely strange to hear that the current POTUS blames his predecessors for the Sino-American trade imbalance. He did characterise the trade imbalance as “very unfair” and “one-sided” but added: "I don't blame China. After all, who can blame a country for being able to take advantage of another country for the sake of its citizens?"
The rhetoric of all Trump’s utterances about trade seems to be based on the idea that the world’s largest economy is getting a raw deal from all its trading partners and he seeks to redress the balance on terms which he views as more favourable to his reading of US interests.