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America Is Funding Its Greatest Military Threat.

Much of the discussion of the Trump tariffs also misses another "big picture." China has a systematic pattern of engaging in mercantilist trade practices. It has also become a serious diplomatic and military rival for the United States. The U.S. trade deficit with China bolsters the Chinese economy and in so doing bolsters the Chinese state and supports China's military ambitions. With the exception of North Korea and Iran, there is simply no worse place in the world for U.S. trade and investment dollars to flow than China. From a global diplomatic and security perspective, it would be much better if those dollars instead flowed to democracies in North and South America, Asia, Africa, and elsewhere.

That would be true even if in the end the U.S. global trade balance would be unchanged, with U.S. imports from China being replaced by U.S. imports from the dozens of other countries that do not pose a security threat, are far more democratic than Beijing, and more or less play by the rules of free trade. That would, in and of itself, be a great positive development. It simply does not make sense for the United States to contribute more than $400 billion (the size of the U.S. trade deficit with China) annually to the economic and military rise of a potentially dangerous global rival when better options are obviously available.

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Author:Mastel, G.
Publication:The International Economy
Geographic Code:9CHIN
Date:Mar 22, 2019
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