This is a Cato special podcast. I'm Caleb Brown.

Bilateral trade is the subject of the day between China and the US.

But where is that sometimes rocky relationship stand today and why should we

care about the United States bilateral trade deficit with China?

Dan Eichinson, Associate Director of the Cato Institute's Center for Trade Policy Studies, comments.

Trade Relations are strong.

Bilateral trade has been increasing year after year, but of course it has created

anxiety particularly in the political classes about the trade deficit, the

bilateral deficit that the United States has with China.

In fact, that deficit was the impetus for the strategic economic dialogue, which then

knew Secretary of the Treasury Hank Paulson initiated. he said, if you really want to deal with the

trade deficit, the bilateral trade deficit, as a matter of policy, you need to look at structural

issues.

It's not a function of trade policy.

We need to look at the reasons that for the disparate patterns of savings and consumption between the Chinese and American people.

And he's been working on that. The strategic economic dialogue is a long-term dialogue.

Opponents of trade like to point to its failure

to produce short-term big bang solutions to support their notion that it's failing

but it's not failing it is getting both parties to the table to talk about important

issues and getting both parties to the table to talk about important issues.

And the alternative that has been promoted

by protectionist in Congress, by the unions,

...