On July 7, 2018, Professor Yusaku Nishimura of our institute accepted an interview with Xinhuanet on the issue of economic and trade frictions provoked by the United States in many countries.
The United States' huge trade deficit is rooted in its irrational economic structure
Professor Yusaku Nishimura has long been engaged in Sino-US economic and trade research. He believes that the unreasonable domestic economic structure of the United States is the fundamental reason why the United States has a trade deficit. Rather than staring at the balance of trade with other countries, the United States should re-examine itself. First, almost 70% of the US GDP comes from consumption, the service industry is the mainstream, and the contribution rate of manufacturing to GDP is very low. Secondly, the higher wages of American workers and manufacturing costs have weakened the global competitiveness of the American manufacturing industry. Third, American manufacturing companies lack efforts. Take the automobile industry as an example. When American cars were exported to Japan, they knew that Japanese cars were driven by right-hand drive, but did not make any changes to their left-hand drive cars. As a result, they could only be eliminated by the Japanese market. Finally, the US dollar is strong and tends to rise, which is objectively detrimental to US merchandise exports. Under the superimposed effect of various reasons, the US exports will naturally decrease, forming a huge trade deficit with other countries in the world.
An open and free trade policy is the aspiration of the people of many countries in the world
Looking back at the Japan-US trade frictions from the 1960s to the 1990s, the United States continued to suppress the newly emerging Japan, constantly escalating the Japan-US "trade frictions" into "economic frictions," and required Japan to make adjustments in a series of economic policies. In September 1985, under the leadership of the U.S. government, the U.S., Japan, Britain, France, and Germany (G5) reached the "Plaza Agreement". The currency exchange rates of these countries appreciated by 10%-12% against the U.S. dollar. As a result, the yen appreciated rapidly.
From June 30 to July 1, the fifth ministerial meeting of the Regional Comprehensive Economic Partnership (RCEP) was held in Tokyo, Japan. The minister and representatives of economy and trade of 16 parties including 10 ASEAN countries, China, Australia, India, Japan, South Korea and New Zealand attended the meeting. The ministers reaffirmed that they will work together to achieve breakthroughs and are committed to completing a regional integration agreement that benefits all countries.
Professor Yusaku Nishimura showed that every country is using actions to show that an open and free trade policy is what the people want. The United States should re-examine itself and realize that only free trade among multiple countries can bring greater benefits.
