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Originally Posted by JazzyTallGuy
We LOSE in a trade war with China. They have the more foreign exchange reserves than any other country in the world. They have the biggest current account balance in the world. We are the biggest creditor nation in the world and we are especially vulnerable because China owns so much of our debt.
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As far as debt, China owns the biggest piece of bond debt of a foreign country-sure, but they can't demand full payment because that's not how it works. Bonds only mature to full value over several years-if they try to cash out now, they will only get a tiny amount.
Furthermore, let's make something very clear(not just you but for everyone
)--the biggest owner of US bond debt BY FAR is the American people. Individual Americans own the majority of our govts debt-several times more than all foreign countries combined.
That cant be overstated.
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If the United States engaged in a trade war with China it would damage our economy far more than it would damage theirs.
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How exactly would it hurt us more?
The US is the biggest consumer in the world-BY FAR. Our buying power is 3 times larger than China's--we can simply take our business elsewhere. Preferably money in America earned and spent and saved in America. That should be our first priority.
On the other hand, China stands to lose its biggest customer.
Furthermore, the first thing we should do is tax the bejeezus out of Chinese made products sold in the US. That might incentivize US companies to start making things HERE again.
US Imports from China in 2009
Electrical Machinery & Equipment $72.9 Billion
Power Generation Equipment $62.4 Billion
Apparel $24.3 Billion
Toys and Games $23.2 Billion
Furniture $16.0 Billion
Iron and Steel $8.0 Billion
Footwear and parts thereof $13.3 Billion
Leather and travel goods $6.0 Billion
Optics and medical equipment $5.6 Billion
Total of these industries $231.7 Billion
US-China Trade Statistics and China's World Trade Statistics
^These are all things that we could and should be making here by Americans who spend their money here and that grows OUR economy, not China's.
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