New York Times reports that the trade deficit between the U.S. and China is still widening. The capitalistic nature of America is pushing American business to outsource and to buy products from China because of the lower prices of labor.
"The trade deficit grew to $46.3 billion, up from a revised $42.6 billion in July and exceeding forecasts for a gap of around $44 billion. The deficit with China accounted for $28 billion of the August shortfall, up from $25.9 billion the month before.
The widening gap with China comes amid rising concerns in Washington about China’s trade dominance and its effect on the global economic recovery. The Obama administration and some lawmakers are pressing China to allow its currency to appreciate more quickly, hoping it will temper Chinese exports by making them more expensive"
The article continues with:
“The only way this works in reducing the U.S. trade deficit is if U.S. consumers shift their consumption of Chinese goods to U.S.-produced goods,” said Dan Greenhaus, the chief economic strategist for Miller Tabak & Company. “You need to increase the appeal of U.S.-based goods.”
Even the thought of making U.S. based goods more appealing is difficult to conjure. Looking around my house, I bet three fourths have a label saying "made in China". Simply, American goods are more expensive in general and may by worse than their Chinese counterparts. One classic example is the automobile industry where Ford is having a horrible time while companies like Toyota are thriving in relation. The better reliability and price do drive home the unfortunate idea that America is not the best at everything.
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