Wilbur Ross has made a larege fortune in business. This does not mean that he understands how trade works. Good evidence of which is his insistence that China should sign large and long term deals to purchase American goods in order to close the trade gap. The problem with this being that it’s not actually China that trades with the US. It is people located in China who trade with people who happen to be in the United States.
So Wilbur m’lad – you’re going to insist that the Chinese government force private citizens buy American, are you? Actually, yes, that is what it seems he is arguing:
BEIJING—U.S. and Chinese trade negotiators are haggling over how to get Beijing to carry out recent promises to purchase more American farm and energy products, with Washington pushing for long-term contracts that Chinese officials are reluctant to commit to.
He really just doesn’t seem to have grasped this basic point:
Ross, who was preceded in Beijing this week by more than 50 U.S. officials, was expected during the two-day visit to try to secure long-term purchases of U.S. farm and energy commodities to help shrink a $375 billion trade deficit with China. U.S. President Donald Trump has demanded that China take steps to reduce the gap by $200 billion annually by 2020.
Purchases by who Wilb?
Imagine this the other way around. Would any American politician – even one appointed by The Donald – seriously consider a suggestion that the Federal Government tell private citizens who they must sign contracts with? Yes, we do accept – wrongly but we do – that government gets to tax people who make the “wrong” decisions with tariffs and so on, we even agree they can ban contracts with sanctions, but we do not even conceive that the Feds get to tell Ford to buy their steel from this or that foreigner now, do we?
So, why this insistence running the other way? Because, my conviction is, Wilbur just doesn’t understand that countries don’t trade, people do. We can even prove this contention. If Ross did understand that it is people who trade with each other then there wouldn’t be all this concern about the trade imbalance, would there? Because it doesn’t matter how many of the people are in China or not in China, does it, as it’s not the nations trading with each other. QED.