The U.S. trade deficit is headline news this week with census data raising alarm bells: What we imported in 2005 exceeded what we exported by a whopping $726 billion or 6 percent of GDP. China accounted for more than $200 billion of the differential. That's real money even by Congressional standards and many lawmakers are calling for action.

"Experts all around the world agree that these astronomical trade deficits are not sustainable and threaten to disrupt the U.S. and global economies," warned Senate Democratic Leader Harry Reid of Nevada.

In September, DOTmed News reported that, despite international lobbying by our industry, the Chinese government maintains its ban on used medical equipment entering the mainland. While the market remains closed to used medical equipment right now, the consensus that China must open itself to freer trade inspires a glimmer of hope for the future.
The balance of trade has hit a tipping point that may propel Congress to pressure China to raise the value of its currency and open trade, according to Reuters. A harsher measure would be to reverse the favored nation status that China now enjoys.

One of the experts calling for change is U.S. Trade Representative Rob Portman who unveiled a top-to-bottom review of U.S.-China trade policy this week calling for greater accountability and enforcement.

"Despite three consecutive years of growing U.S. exports to China, our bilateral trade relationship with China today lacks equity, durability and balance in the opportunities it provides," Ambassador Portman wrote in a letter to Congress. "The time has come to readjust our trade policy with respect to China. As a mature trading partner, China should be held accountable for its actions and required to live up to its responsibilities, including opening markets and enforcing intellectual property rights," Portman said. "We will use all options available to meet this challenge."

Meanwhile, in the new medical equipment market, the U.S. runs a trade surplus in one category and a deficit in the other category by which the data are compiled. Here's the tale of the tape: The U.S. had $121 million surplus with China for 2005 trade in Electromedical and Electrotherapeutic Apparatus (compared to a surplus of $99 million in 2004). The U.S. had a $65 million trade deficit with China for 2005 in Surgical and Medical Instruments (compared to a deficit of $46 million in 2004). Source: U.S. International Trade Statistics, U.S. Census Bureau.

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