Trump appointed the Japanese trade war veteran Littichizer to deal with China in the 1980s.(Reuters)

If the government allows falsification or copying American products, it is stealing our future, and it is no longer free trade.U.S. President Reagan commented on Japan after reaching Plaza Accord in September 1985.From a lot of perspectives, today is very similar to the replica of the 1980s. It is just the role of the presidential role from the Hollywood movie star to a TV reality star, and the villain characters are replaced by other countries.

In the 1980s, Japan was described as the largest economic threat in the United States MDASH; MDASH; not only because of the allegations of stealing intellectual property rights, but also because of the industrial policy of currency manipulation, the country supported by the state, the hollow of the United States and the huge bilateral trade deficitWorries.In confrontation with the United States, Japan finally retreated, and paid a heavy price MDash; mdash; for nearly 30 years, economic stagnation and currency tightening.Today, the same plot is starred by China.

Both China and Japan have resentful businessism, and there are other common things: the United States has always been a bad habit of finding a sin lamb for its own economic problems, and China and Japan have become victims.Like the United States in the 1980s, the blow to China today is the result of the increasingly dangerous macroeconomic imbalance in the United States.Regardless of Japan or China, the severe shortage of domestic savings leads to huge frequent projects and trade deficits, which has laid the foundation for the United States for 30 years to fight the two major economic giants in Asia.

When Ligen came to power in January 1981, the net domestic savings rate was 7.8%of national income, and the current project was basically balanced.Within two and a half years, Reagan's popular tax reduction policy has plummeted the domestic savings rate to 3.7%, and the balance of projects and commodity trade becomes long -lasting deficit.From this important perspective, the so -called trade problem in the United States is largely self -contained.

But the Reagan administration denied this, and it ignored the relationship between savings and trade imbalances.On the contrary, responsibility was pushed to Japan.In the first five years of the 1980s, Japan accounted for 42%of the US commodity trade deficit.Because of the various resentment of unfair and illegal trade behaviors, the crackdown on Japan is popular.The leader at the time was a young US Deputy Trade Representative, named Robert Lighthizer.

For 30 years, the similarities are obvious.Unlike Reagan, the US economy that President Trump took over does not have sufficient savings.When Trump came to power in January 2017, the net domestic savings rate was only 3%, which was far lower than the level at the beginning of the Reagan era.But Trump, like his former president, also chose a large -scale tax cut. Reagan held a new banner of Morning in American (Morning in American, and Trump made the United States Make America Great Again again.

As a result, the predictable federal budget deficit expands, and its increase is enough to offset the increased periodic private savings that are usually accompanied by mature economic expansion.As a result, the net domestic savings rate actually fell to 2.8%of the national income at the end of 2018, resulting in a serious deficit of the US international revenue and expenditure mdash; mdash; at the end of 2018, the frequent project deficit was 2.6%of GDP (GDP).The commodity trade gap is 4.5%.

This is where China replaced Japan in the 1980s.On the surface, the threat seems to be greater.After all, China accounted for 48%of the US commodity trade deficit in 2018, while Japan accounted for only 42%of Japan in the first five years of the 1980s.But this comparison is distorted by the global supply chain because there is basically no global supply chain in the 1980s.Data from the Economic Cooperation and Development Organization (OECD) and the World Trade Organization (WTO) show that about 35%to 40%of the bilateral trade deficit between China and the United States, from semi -finished products produced outside China, and then assembled and shipped to the United States in China.This means that the proportion of Chinese manufacturing in the current US trade deficit is actually less than that in Japan in the 1980s.

Like fighting Japan in the 1980s, China that broke out today is also popular because of the macroeconomic environment in the United States.This is a serious mistake.If the national savings do not increase MDash; MDASH; from the current American budget trajectory, it is difficult to improve mdash; MDASH; trade can only be transferred from China to other trading partners in the United States.The US trade transfer may shift to a higher -cost platform, and American consumers will be impacted, which is equivalent to increasing taxes.

Ironically, Trump also appointed the Japanese trade war veteran Littichizer in the 1980s to deal with China.Unfortunately, today's Littichizer is as confused about macro issues as at the time.

In the two trade war, the United States denied reality and was almost delusional.The Riden government is intoxicated by the theory of unprepared supply -side economics, especially the theory of tax cuts that can self -funded itself. It does not recognize the relationship between increasingly expanding budgets and trade deficits.Today, the fascinating force of low interest rates, coupled with the recent abuse of the Modern Monetary theory of Witchcraft Economics, is also attractive to the Trump administration and Congress cross -party.

The reason why the severe macroeconomic constraints facing the US economy that is not enough to be ignored is simple: By reducing the budget deficit to boost domestic savings and ultimately reduce the trade deficit, it will not receive political support in the United States.In the sum of 18%of medical expenditures, the contented of the defense expenditure exceeding the second to the seventh major military budget, the tax reduction order federal government tax revenue decreased to 16.5%of the GDP, which was severely lower than the average 17.4%in the past 50 years.The United States also wants to have both fish and bear's paw.

This old drama is at least very disturbing.The United States once again believes that fighting others MDASH; mdash; used to be Japan, now it is China MDASH; mdash; it is much easier than self -reliance.But this time, this play may have a completely different ending.

(Author Stephen S. Roach is a teacher of Yale University, former chairman of Morgan Stanley Asia, authoring to be unbalanced)

(English Original: JAPAN THIN, China Now)

(Copyright: Project Syndicate, 2019)