The United States, China, etc. all have trade policies that are fundamentally unsustainable and result in persistent trade imbalances.
This causes all sorts of poor economic outcomes for large sectors of those countries. For example, an anaemic household sector in China and over investments in housing, huge private and public sector deficits in the United States, etc.
In the free market world of Adam Smith and comparative advantage, persistent trade imbalances should not exist.
Over the medium to long term, imports are meant to pay for exports.
If there are persistent trade imbalances, it means there is persistent under consumption (China) or over consumption (United States).
Note: This is not just limited to these countries.
At some point, there is going to be an economic crisis because it can’t continue forever.
There may not be any need for that.
The United States, China, etc. all have trade policies that are fundamentally unsustainable and result in persistent trade imbalances.
This causes all sorts of poor economic outcomes for large sectors of those countries. For example, an anaemic household sector in China and over investments in housing, huge private and public sector deficits in the United States, etc.
In the free market world of Adam Smith and comparative advantage, persistent trade imbalances should not exist.
Over the medium to long term, imports are meant to pay for exports.
If there are persistent trade imbalances, it means there is persistent under consumption (China) or over consumption (United States).
Note: This is not just limited to these countries.
At some point, there is going to be an economic crisis because it can’t continue forever.