US Treasury Sec: the "Big Win" is to Rebalance Global Trade

US Treasury Secretary, Scott Bessent makes the complicated Liberation Day Tariff plan simple. A part of our discussions with our allies is "How do we get China to rebalance?" That is the "big win" here.

"The US is trying to rebalance towards more manufacturing. China needs to rebalance towards more consumption."

Why the U.S. Trade Imbalance with China Is More Than Just an Economic Problem

China has become the "world's factory" exporting cheap goods while refusing or extremely limiting imports from other nations. It's a national security issue for the United States just as much as it is economic.

When the U.S. buys way more from China than China buys from the U.S., it's called a trade imbalance. Economically, this can hurt American businesses and workers because it means fewer jobs and industries at home. But it's also a national security issue for a few key reasons:

1. Dependence on China: If the U.S. relies heavily on China for important goods like medicine, electronics, or military-related parts, it becomes vulnerable. If tensions rise, China could cut off supplies. Which it did during Covid, when it held back medical masks and other supplies from the U.S.

2. Loss of Critical Industries: When key manufacturing moves to China, the U.S. loses not just jobs but also the ability to produce important technologies or defense materials on its own.

3. Intellectual Property Risks: China has been accused of forcing U.S. companies to share sensitive tech or stealing trade secrets, which can weaken U.S. innovation and give China a military or strategic edge.

4. Funding Strategic Rivals: The more the U.S. spends on Chinese goods, the more money China earns—money it can use to build up its own military and global influence, sometimes in ways that go against U.S. interests. It's not a stretch to say that China has built most of their army with the US trade imbalance.