Us Trade Relationschina

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Us Trade Relationschina&Japan Essay, Research Paper U.S. Trade Relations with China and Japan (Post World War II) Seminar on U.S. and Asia Pacific The United States trades with countries all over the world, creating deficits or surpluses with these countries. The highest deficit that the US has currently is that with Japan, followed by China. With China and Japan s economies among the world s largest, the United States trade relations with the two are important. The path to determine these relations was not easy to establish; even today it is still being worked on. Since WWII, Japan and the US have had trade interactions which mutually benefited their economies but took many steps and hardships to get to the dominating level where they are now. With the ending of economic

isolationism after the Cultural Revolution, China and the US have taken careful steps to open their markets to each other and normalize trade relations. During the past decades while developing trade relations, the US has formed large deficits, leaving some with much cause for concern and discussion. But what is a deficit, and is it even a bad thing for the US to have? A bilateral deficit is when a country buys more dollars in products than it sells. Politicians often label the US deficit as detrimental to the US economy because it takes jobs away from the American worker. Bob Dole and Ross Perot has sought to make America s increasing deficit a campaign issue, saying that ballooning deficits mean the loss of millions of American jobs. Contrary to the common spin, trade deficits

are not necessarily bad news. A trade deficit can even be good news for an economy, reflecting flush consumers and an attractive climate for investment, according to Daniel Griswold, associate director of the Center for Trade Policy Studies at the Cato Institute. Regardless of whether a deficit is a good or bad thing, the United States still has increasing deficits. How were trade relationships formed with Japan and China? Were there always deficits, and if not, what caused them? What are the current issues in trading with Japan and China, and where does the US go from here? We will attempt to answer these questions and issues throughout the discussion of Japan and China. The Japan and United States Trade Imbalances Since World War II, Japan has experienced a miracle of economic

success. The trading of raw and manufactured goods with the United States was key in lifting Japan back on their feet after the war. The integration of Japanese businesses into the United States gave Japan opportunities to expand their markets and economy globally. The Japanese economic miracle can be explained by examining the different segments of the Japanese economy and the imbalances of trading with the United States. One question we have about Japan s economic recovery is, Was it the Japanese who rebuilt themselves, or did the United States open market and rebuilding efforts trigger Japan s economic burst? By researching the history of the bilateral trade relations between Japan and the United States, we will explain the possibilities the future holds for these countries.

Japan and the United States have had strong trade flows in both their imports and exports. The most outstanding imports the United States were receiving were textiles, steel, color TVs, and automobiles. Japanese firms, especially those in the manufacturing sector, were portrayed in the United States as efficient organizations producing high-quality products and sometimes the glory of high economic growth and strong exports was extended to the Japanese society in general, (Ito, page 365). The main issue at hand is, how do Japan and the United States maintain an equal balance of trade. Whereas nearly all nations have sought trade expansion, they have generally tried to avoid an excess of imports over exports, which is known as a deficit in the balance of trade (Moon, P.5). For