RENEE MONTAGNE, host:
This morning the government released the latest numbers on the U.S. trade deficit. It widened, as expected. The numbers also show that the U.S. bought $20 billion more from China than it sold to China in the month of May. That trade gap is one of the many issues heating up the charged political atmosphere between the U.S. and China these days
So we turn to David Wessel, deputy Washington bureau chief of the Wall Street Journal, as we often do. Good morning, David.
Mr. DAVID WESSEL (Wall Street Journal): Good morning, Renee.
MONTAGNE: To help us sort this out, just how big is the U.S. trade deficit with China?
Mr. WESSEL: Well, it's very big. Even though the U.S. exports to China have grown enormously and China has become the fourth largest export market for U.S. goods, our trade deficit with China is bigger than our trade deficit with any other country. We buy about $300 billion worth of stuff from there every year. About one in every six dollars of imported goods comes from China.
MONTAGNE: Let's step back a moment. If Americans want to buy Chinese products, in a way, why is that a political problem in Washington?
Mr. WESSEL: That's a really good question, you know. There are a lot of voters who go to Wal-Mart and are very pleased to save money by buying cheaper Chinese goods. Yet they seemed to be very anxious about globalization, about losing their jobs, about the fact that their wages don't seem to be going up as fast as those guys on Wall Street. They're worried about foreigners beating us at our own game. And they seemed to have seized on China as a lightning rod for all these anxieties.
China has become the demon that explains to American workers all that seems to be going wrong in their economic life. Politicians are very sensitive to political winds and the whims of their constituents. And I think we see in Congress a reflection of the anxiety about globalization and inequality playing out in hostility to China.
MONTAGNE: Well, there's another version of that. It seems like you can't wake up without hearing about some unsafe or a tainted product or food coming from China. How does that play into the economic anxieties about that country?
Mr. WESSEL: I think it just fuels all the concern about China. We do import a lot of stuff: toothpaste, tires, food. And I think what is pointed up to Americans is A) that we're very dependent on the Chinese, and in the globalizing economy it means we're dependent on the quality of their food and safety regulations, and that makes people anxious. It also highlights something that the administration has been talking quite a bit about, which is China is a big factor in the global environment. So as they become a big economic power, their influence on our - even our air, on global warming, is also enormous, and this just points that out.
MONTAGNE: So heating up this talk in Congress about doing something - is that likely to happen in fact?
Mr. WESSEL: Congress is talking about doing all sorts of things. Some of them are changing the language of laws to give the treasury a bigger stick to whack the Chinese over keeping their currency down. There's also even talk about putting tariffs on Chinese goods to make them more expensive in the U.S. It doesn't look like anything is imminent there, but each time this bills has come up they seemed to have a little more support.
The Bush administration is responding to this. They're trying to get the International Monetary Fund more involved in dealing with the Chinese currency question, the accusations that the Chinese hold their currency low to give themselves a trade advantage. And Treasury Secretary Paulson has launched this very high-profile strategic economic dialogue with casts of characters from both countries to try and do business on a number of these issues and move things forward. The problem is that process moves very slowly.
So far, their big victory is that we can have more airline flights between China and the U.S., and China will open up a little bit more to U.S. financial services firms. That's not going to do very much to help the worker in Ohio, who is anxious about his wages or her wages and their kids' wages.
MONTAGNE: David Wessel is deputy Washington bureau chief of the Wall Street Journal. Thanks very much.
Mr. WESSEL: You're welcome.
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