Published on July 13, 2019.
Based on a column by Tamura Hideo in the monthly magazine HANADA, this article criticizes the perversion of Japanese media that labels the U.S.-China trade war as “protectionism.”
It shows the reality that China’s trade surplus with the United States has served as the source of yuan issuance, military expansion, the Belt and Road Initiative, technology theft, and domination of neighboring countries, and argues that the Trump administration’s sanctions against China are directly connected to the security of Japan, Taiwan, and Southeast Asia.

July 13, 2019.
China’s balance of payments is 120 billion dollars, so if its surplus with the United States is blown away, China will fall into deficit, and finance will contract. Then its economic and military expansion will
Tamura Hideo is not a commentator who talks about economics based on secondhand knowledge from the Ministry of Finance.
Still less is he someone who merely repeats the editorials of the Asahi Shimbun or Nikkei; he is one of the few genuine experts on the economy.
The following is from his column, which appears at the beginning of this month’s issue of the monthly magazine HANADA, released on the 26th.
All emphases in the text, other than the headings, are mine.
The perversion of Japanese media that denigrates Trump.
On July 6, the United States and China each activated sanctions and retaliatory tariffs on imports from the other country, entering a trade war.
What surprised me was that, in Japan, there are overwhelmingly many media outlets and intellectuals who side with China.
It is a perversion in which they regard U.S. President Trump as a “protectionist” and, in effect, elevate Chinese President Xi Jinping, who ignores free-trade rules.
First, there is the editorial in the morning edition of the Nikkei Shimbun dated the 7th.
The headline was “The U.S. and China Should Withdraw Sanctions and Ease Friction Through Dialogue,” and while the content criticizes China by saying such things as “China’s intellectual property infringement, which steals technology and information through various methods, is malicious,” its conclusion is, “Even so, if they rush into sanctions and retaliation, they will only strangle each other.”
It is as if to say that both sides are equally at fault.
Then it concludes, “The United States has also imposed import restrictions on steel and aluminum against countries other than China. Japan and Europe must also cooperate to contain protectionist trade.”
Its intention to give readers the impression that “the United States equals protectionist trade” is completely transparent.
The Asahi Shimbun’s editorial of the 4th was titled “Stop the Chain of Retaliatory Tariffs and Protectionism.”
After placing America’s steel and aluminum import restrictions and “high tariffs on Chinese products” on the same level, it lectured the United States that it “should correct its protectionism.”
On NHK’s Sunday Debate on the 8th as well, many experts expressed concern about a “protectionist United States.”
Mainstream media in Europe and the United States are generally critical of Trump’s policies, but they do not simply decide that the Trump administration’s hardline policy toward China is protectionism.
In Britain, the birthplace of the classical economic theory of “free trade,” Parliament, after many years of debate, enshrined free trade as a political principle.
Even when import restrictions were adopted, the political and journalistic worlds did not regard them as “protectionism,” but called them “reciprocity” or “fair trade,” and positioned them strictly within the framework of free trade.
The U.S. Congress and successive presidents have followed this example.
In the 1980s, President Reagan, a “free trader,” called the application of Section 301 of the Trade Act against Japan “fair trade.”
The Trump line is its China version.
By contrast, Japanese economists, as always, regard textbook-style “free trade” as a golden rule, and half-informed media figures, intellectuals, and politicians chant the same line and turn to the defense of China.
The theory of free trade says that if tariffs and non-tariff barriers are eliminated, and each country specializes in industries where it has an advantage and divides labor with other countries, all will prosper.
But if a country is told to abandon core industries and high technology and rely on imports from other countries, or to entrust the production of staple foods such as rice to other countries, then national sovereignty is unnecessary.
Companies that sacrifice domestic employment and produce only in other countries betray their home countries in the name of free trade.
The real international free-trade system is competition among nations, and it produces winners and losers. Its driving force is political dynamics among states, not empty economic chanting.
The free-trade rules of the World Trade Organization, or WTO, are the product of compromise among states, and there is no reason they should be a utopia of free trade.
For only Japanese media outlets and intellectuals to endlessly invoke WTO rules like identical pieces of candy and criticize President Trump is to expose their ignorance of international politics.
It is China that has taken advantage of the WTO system and done whatever it wants, and as even the pro-China Nikkei editorial admits, it is extremely malicious. Yet the media do not demand punishment of China for violating WTO rules; instead, they condemn America’s retaliatory measures.
That is precisely what is unfair.
The most serious problem is the lack of recognition that the China threat derives from its trade surplus with the United States.
Chinese authorities have absorbed every inflowing dollar, issued yuan on the basis of foreign exchange reserves, expanded finance quantitatively, and achieved high growth.
The acquisition of U.S. high-tech companies and the war chest for the Chinese economic-sphere concept known as the Belt and Road Initiative also rely on foreign exchange reserves.
The total surplus with the United States over the ten years up to last year was 3.2 trillion dollars, equivalent to more than 90 percent of the increase in yuan fund issuance during that period.
Using this abundant funding as its basis, China advances military expansion, watches for an opportunity to seize the Senkaku Islands in Okinawa Prefecture, occupies and fills in reefs in the South China Sea, and turns them into military bases.
It draws Japanese, American, and European companies into its expanding market and forces them to provide advanced technology.
It steals technology through cyberattacks and corporate acquisitions.
It launches export and investment offensives against weak neighboring countries, inflates their debt burdens, and when they have difficulty repaying, takes over local infrastructure.
The Trump administration is preparing to add another 200 billion dollars, and then another 300 billion dollars, to the total value of imports subject to sanctions against China, bringing the total to 550 billion dollars.
Since the total value of U.S. imports from China is 520 billion dollars, the plan is to impose additional tariffs on all imports.
China’s balance of payments is 120 billion dollars, so if its surplus with the United States is blown away, China will fall into deficit, and finance will contract.
Then its economic and military expansion will stop.
That will become security for Japan, Taiwan, Southeast Asia, and others.
The primary motive of Trump’s policy is “America First,” but for Japan, it is security.
Seeing Japanese reporting that repeatedly chants “protectionist America,” Mr. Xi must surely be smiling to himself.