Our unfavorable trade ratio with our democratic ally, Japan, is currently about 2-1. Even when Tokyo was much more protectionist than it is today, our unfavorable trade ratio with Japan was nowhere close to 5-1. These numbers are deeply troubling. But they are being generally ignored right now because the U.S. economy is currently operating at close to capacity and unemployment is at very low levels. For now, our trade deficit with China must be viewed primarily as an immediate, strategic problem for the United States.
Chinese mercantilism is a negative and dangerous force that hurts fundamental U.S. interests.
For example, China has been gaining U.S. market share at the expense of America's friends and allies in Asia. What's more, China transforms its large trade surpluses with the United States into foreign exchange reserves from which it draws American dollars to purchase advanced military weapons from Russia and other countries. Finally, to bring this full circle, China's severe restrictions on imports of goods and services from the United States keep in check the sort of positive U.S. influences on Chinese society that the President claims are being exerted. The time has come for the United States to begin tough bilateral negotiations aimed at opening China's market much wider to U.S. goods and services. Our immediate goal should be obvious reducing the lopsided unfavorable trade ratio.