The Buzz

America’s 'China Trade Deficit' Has Become a Security Problem

The U.S. trade deficit with China hit a critical milestone in 2015. It now stands at a mind-numbing $1 billion a day, and that $365 billion annual trade deficit continues to rise with the lift of China’s illegal export subsidies, sweatshop labor, pollution havens and undervalued currency.

The failure to understand that America’s Chinese import dependence has now reached critical mass as a national security issue comes from the very mind-numbing magnitude of the numbers involved. Let’s see, however, if we can put the size of the U.S. trade deficit with China into some perspective; and let’s start with the F-22—the only U.S. fighter jet with the agility, speed and stealth to overcome the latest Russian air defense systems and newest Chinese and Russian fighters.

America can deploy only 187 F-22s because Congress, with President Obama’s veto gun to its head, cancelled further construction due to high costs: about $360 million a plane. Note, however, that a sufficient numbers of F-22s working in tandem with F-35s would likely be pivotal to maintaining air dominance in theater should push come to shove with either Russia or China in the coming decades. Yet we simply don’t have the numbers necessary to “darken the skies” with fighter jets as America did in World War II.

In contrast, China surely will have the capability to churn out record numbers of its F-22 clone known as the Chengdu J-20 Mighty Dragon. The sad irony here is that even as Congress was voting to halt F-22 construction, Chinese cyber hackers were brazenly stealing the F-22’s blueprints.

Now here’s the relevant trade deficit math: Assuming that it costs about half the price for China to build its F-22 clone because of cheap labor and no need to pay for the R&D that went into developing the F-22, China can use a little more than one month of its trade surplus to replicate the entire U.S. F-22 air wing—and pay for 1,000 of these planes with American consumer dollars in less than six months.

Of course, you can do the (admittedly) rough numbers for any of a number of other Chinese weapons systems. For example, one day’s worth of China’s trade surplus with the United States buys 1,000 new cruise missiles that Beijing can point at Taipei or one hundred anti-ship ballistic missiles to target American carriers.

Similarly, just one week’s worth of China’s trade surplus finances the construction of at least three new Chinese aircraft carriers to patrol the South China Sea and Indian Ocean or twenty new Yuan class diesel electric submarines to lay in wait for Japanese destroyers or American aircraft carrier strike groups. And Beijing can pay for its entire annual defense budget with a mere five months of what American consumers contribute to Beijing’s imperial fisc.

It’s not just that American consumers are helping to finance the construction of China’s war machine. There is also the creeping loss of control over core strategic elements like the U.S. food chain—once one of the strongest in the world from a country blessed with a temperate climate and some of the most fertile soil on the planet.

The poster child for the loss of control of America’s heartland to Beijing is the 2013 sale of Smithfield Foods to China for what was widely reported in the press as a “whopping” $5 billion. But just what exactly is “whopping” about a sum of money that China accumulates trading with the United States in a mere five days. Of course, now the world’s largest communist nation owns 1 of every 4 pigs born and raised in America.

And by the way, it’s not just the American food chain China is targeting. China has now bid what is truly a whopping $83 billion to buy the high-tech Swiss agro-conglomerate Syngenta, with its portfolio of top-tier fertilizers and chemicals and patent-protected seeds.  

Has anybody seen how Russia regularly tries to strangle and then extort funds from Europe with its natural gas monopoly? If anyone thinks Beijing won’t do the same if it gains as much control of the global food chain as it now has over the world’s manufacturing base, just remember the Chinese ban in 2010 on the export of rare earths to a Japan that Beijing was trying to bend to its Senkaku/Diaoyu Islands will.