US trade imbalance rooted in domestic woes

The "reciprocal tariffs" imposed by the Trump administration violate the rules of the World Trade Organization, posing a serious challenge to the multilateral trading system and representing a self-defeating approach. Trump's tariff policies lack a basic understanding of macroeconomic principles and arbitrarily attribute the trade imbalances caused by domestic reasons in the US to other countries. The root cause of the substantial trade deficit lies in the excessively low savings rate within the country, rather than a lack of "reciprocity" among trading partners.

Since Trump's first term, despite the ongoing "tariff war," the US trade deficit in goods has only increased instead of decreasing. The economic policies of the Trump administration exhibit inherent contradictions, as measures such as tariffs combined with tax cuts, and mass deportations of immigrants, are bound to drive up inflation in the US. The policy uncertainty is also manifesting negative impacts on the US stock market. Several economists have warned that the "tariff war" will strengthen the US dollar, raise prices of crucial intermediate goods, and further diminish US exports.

In the face of the "tariff war" initiated by the US in recent years, China has responded calmly without yielding to pressure, demonstrating resilience in foreign trade exports. In the current and forthcoming periods, China needs to continually enrich its policy toolkit and effectively implement "asymmetric countermeasures" against the US. It should accelerate various reforms as planned, promote diversification in foreign trade, actively establish a new open pattern, and lay a more solid foundation to effectively address the strategic competition from the US.