The United States and Chinese trade relation dates back in the year 1971 when these two countries re-opened doors to each other (DoS). Though the relationship of these two economies has been seen to be somewhat un-easy especially due to their recurring trade wars, there have been some significant milestones of mutually beneficial relationship.
According to USSB, the trading volume from the year 1971 has significantly been on the rise both in terms of Exports and imports; up to to levels of US Dollars 532.2 Billion in 2012 from a low of US Dollars 4.7 in million in 1972.
In a recent wave of discussion on CNBC of how the “Trade gap between these two giants has cost the United States a whooping US Dollars 37 Billion in wages”. The increasing deficit between the two giants has been linked to the loss of wages up to the highs of US Dollars 37 Million in the year 2011 (Holliday). The study conducted by the Economic Policy Institute (EPI) suggests that over 2.7 million jobs have been lost within the United States from the year 2001 to 2011.
The most affected industry is the Manufacturing sector. The study also suggested that the displaced employees upon getting other jobs in non-trade related industries lost over US Dollars 13,504.00 per worker which on average amounted to US Dollars 37 Billion (Holliday). These deficits have been seen to harm the working American families especially those that are within the most affected sectors like manufacturing.
These trade relations have been affected by the strained quarrels over China’s alleged manipulation of its currency and usage of industry-subsidies which are deemed illegal. This has triggered the argument within the American government that it is out of these malpractices that the United States is unable to boost its exports which hampers its ability to increase jobs in return (Holliday).
According to THF, China on the other hand has not been left behind on this as it has experienced deficits of up to US Dollars 10 Billion and costing over 1 Million jobs to its natives, who are the minority workers.
A brief history of the trading between these two nations can assist the policy makers to come up with viable adjustments and developments which would be stipulated into policies to help curb the growing deficit thus in return creating more jobs and reviving the dwindling sectors as well (THF).
A brief Economic Trade history by the two nations forms the basis of understanding the major milestones. The first decade that is between 1970 to 1980 was a period that instigated institution building that saw the lift of certain barns and barriers of trade. These allowed the flow of technology, goods and people between the two nations. This was the period when the congress passed the trade agreement that conferred the contigent Most Favoured Nation (MFN) status on the Chinese Nation that is on 24th January 1980 (DoS). The figures rose from US Dolars 991.7 Million (1971) to US Dollars 2.3 Billion in 1979 (USSB).