Trade Deficit: America Defenseless or America Dominant? Trade Deficits Don't Put America at Risk
Byline: Sara J. Fitzgerald, SPECIAL TO THE WASHINGTON TIMES
We're used to hearing that trade deficits are bad, but the alarm raised by some deficit-phobes doesn't stop there. According to these critics, a trade deficit also threatens national security. They contend that our military depends too much on imported goods, so a trade deficit makes America vulnerable.
As William R. Hawkins, a senior fellow for national security studies at the U.S. Business and Industry Council, wrote in a recent op-ed: "If America is to maintain the robust industrial base and sound finances necessary for world leadership in turbulent times, it must reconcile its defense and economic policies to expand domestic manufacturing and high-tech investment while ending the debilitating trade deficits."
This isn't true. America, like any other trading nation, exports so that it can import. In other words, we're not trading out of desperation; we're trading by choice. And as President Bush notes in the national security strategy he released last fall, trade is a key building block of homeland security.
Take the fact that the United States imports semiconductors from Japan. Skeptics claim this poses a national-security risk. What would happen, they ask, if Japan stopped exporting such products? But think about it: Why would Japan choose to cut itself off from one of the largest semiconductor markets in the world? If it did, where would it sell the semiconductors it makes? The government couldn't let them pile up on the docks; Japanese manufacturers would risk bankruptcy. More likely, Japan would sell them to another country in which case the United States could purchase the semiconductors from them.
Japan isn't the only country that supplies us with products for our military. We also import many raw specialty metals from Africa. These are often materials that don't exist here and can be obtained only through trade. In this way, running a trade deficit actually makes us safer by giving us a way to get these necessary raw materials into the United States.
As my Heritage Foundation colleague Daniel Mitchell pointed out in an op-ed for The Washington Times, a trade deficit isn't necessarily bad in fact, it's a sign that our economy is strong. We wouldn't have a trade deficit if we weren't attracting foreign capital. Investors from other countries want to spend their money here because they have faith in our economy.
And while we have a deficit in some areas, agriculture is one of the industries that the United States has a trade surplus in; we are the world's largest agricultural exporter. …