THE U.S TRADE DEFICIT WITH CHINA: CAUSES AND PROPOSED SOLUTIONS

• Main Authors: Junhua Jia, Suk Kim
• Format: Article
• Language: English
• Published: People & Global Business Association (P&GBA) 2008-09-01
• Series: Global Business and Finance Review
• Subjects: trade deficit; diplomatic relationship; ipr; trade relationship
• Online Access: http://www.gbfrjournal.org/pds/journal/thesis/20150623100054-EL264.pdf

The U.S-China trade relationship has undergone tremendous growth since 1979 when the United States and China establish their diplomatic relationship. The trade volumes have increased dramatically after China joined the World Trade Organization in 2001. Recently, the trade relationship between the two countries has experienced some setbacks—specially in terms of the huge U.S trade deficits with China, the currency manipulation by the Chinese government, and China’s failure in enforcing strict laws to protect intellectual property rights(IPR) of U.S companies. Effective solutions to address such trade frictions may involve consideration of trade policies, negotiation, and cooperation between the two countries. This article first provides an overview the current trade status and friction between U.S and China. Next, the possible root causes of such tensions are explored. Finally, possible solutions are presented to alleviate such tensions and to all both countries benefit from a mutually harmonious trade relationship.