US President Donald Trump has correctly recognized that American companies that have offshored US manufacturing to low wage countries like China are the primary reason for the massive US trade deficit and loss of millions of factory jobs in the US, says an American economist and author.
“Perhaps President Trump has finally realized that the problem is not really China sending Chinese goods to the United States, but the American global corporations who have moved offshore their production for American markets,” said Paul Craig Roberts, who was Assistant Secretary of the US Treasury Department under former President Ronald Reagan.
“So that the goods and services sold to Americans are no longer produced by American workforce, but produced overseas in order to increase the profits of the American global corporations,” Roberts said in a phone interview with Press TV on Saturday.
“This is the point that I’ve been emphasizing for many years and apparently its now penetrated the White House,” said Roberts, a promoter of supply-side economics and an opponent of recent US foreign policy.
Trump on Friday announced his will increase tariffs on Chinese imports in response to China's announcement of new tariffs on American imports and ordered US companies to leave the country.
Trump cannot legally compel US companies to abandon China immediately. He gave no detail on how he might proceed with any such order.
The order came after China announced earlier on Friday it would impose new tariffs on US soybeans, lobsters, peanut butter and other imports worth $75 billion in retaliation for Washington's latest round of punitive duties that take effect in two rounds, September 1 and December 15.
The United States will raise existing tariffs on $250 billion in Chinese imports to 30 percent from 25 percent, beginning on October 1, Trump said on Twitter Friday.
He added that the duties on another $300 billion in Chinese products, set to take effect on September 1, will be increased by 5 percent, reaching 15 percent.
Experts said tax policy changes and sanctions could be used to restrict or reduce US business activity in China, but it would take years to disentangle the world’s two largest economies.
Trump asserted on Saturday that he has the authority to make good on his threat to force all American businesses to leave China, citing the International Emergency Economic Powers Act of 1977.
As he arrived in France for the annual G7 summit, Trump posted a message on Twitter, citing a national security law.
“For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977,” Trump wrote. “Case closed!”