Trading Partners

   For the all the political complaining about international trade, it's time to take a quick look at just how important it really is. It's certainly a big part of the American economy, and there's a lot of talk about "free trade," even as candidates call for import taxes (tariffs) on goods made in other countries, and more openings for American goods to be sold (exported) to others.
   That's not "free" trade, since it is an attempt to restrict trading to benefit one side and punish another. Quickly, a tariff war starts, and consumer prices rise on both sides, and retaliation escalates, and nobody wins. That happened in the 1930s, and worsened the worldwide Great Depression.
   Totally "free" trade isn't the answer, either, because a wealthier side can easily undercut the other so that one side ends up with all the money and the other side ends up in poverty. But that's OK, say the winners. We'll just go on to the next customer and sell our stuff to them, and fix it so they can't sell stuff to us.
   That's called colonialism, and soon enough the winner runs out of customers entirely. So the winner becomes the wealthiest country in the world and everyone else has little or nothing. That too is OK, say the winners, since we're the richest and the biggest, they'll do what we tell them, because we're better than they are.
   But being a bigger and richer person doesn't make you a better person. Trade is a two-way deal, and for both sides to grow, each side must benefit.
   
   At the moment, China's economy is growing at the rate of more than 6 percent yearly, compared to America's growth rate of less than 2 percent. Is this bad? No, because America is already highly developed, and China is just getting started. Just as a teenager grows faster than an adult, a new economy grows faster until it matures, and settles into slower growth.
   It is true that America's trade deficit with China is large and growing. During the first six months of this year, China exported $212.2 billion worth of stuff to the U.S., and imported only $51.2 billion worth. But that's partly because production costs are much lower in China, and American workers are generally more skilled, more highly educated, and are more highly paid. In case you hadn't noticed, the Garment District left New York City decades ago.
   Moreover, China is not America's biggest trading partner. That ranking goes to Canada, with a total of $270.8 billion of stuff going back and forth -- $134 billion going to Canada and $137 billion imported from Canada.
   In third place is Mexico, with a total trade with the U.S. valued at $259 billion during the first half of 2016.
   And with an economic growth rate of an estimated 6.6 percent this year, according to data from the International Monetary Fund, China's economy is "rebalancing, from industry to services, and from investment to consumption." These are both signs of a maturing economy.
   The world's largest economy is the U.S. with some $18 trillion worth of goods and services produced yearly.
   It's important to remember that international trade is just that, an exchange of business, goods and services between separate, independent nations. For one nation, even if larger and stronger, to dominate and squeeze more benefits from another nation is not really "free" trade, nor is it "fair" trade. Instead, it is a form of commercial colonialism that reduces one trading partner while it enriches the dominant nation. In turn, the resentment that such a situation creates quickly leads to tariff wars, trade wars and, sooner or later, to real war.