It is structural issues that contribute to the trade imbalances between the two countries.
"Tracking a trade deficit is misleading. All that [trade deficit] means is that we in the United States consume more," said Tori K. Whiting, a research associate at Washington-based think tank The Heritage Foundation.
To address the imbalances, both countries should carry out structural reforms rather than just narrow the trade deficit.
China has made progress. Its current account has become more balanced in recent years. The share of its current account surplus to gross domestic product dropped below 2 percent in 2016, compared with about 9.9 percent in 2007.
The bilateral trade imbalances between the United States and China can be solved through more trade and investment rather than a trade war, the IIF said.
To balance bilateral trade, the two countries agreed to take action to expand trade in beef and chicken, and increase access for U.S. financial firms, as part of the 100-day action plan.
It is better for both sides to address economic differences such as trade imbalances through candid dialogue, said Hong Lei, Chinese Consul General in Chicago.
"Further opening up markets, promoting bilateral investment, and strengthening trade ties at a local level could contribute to stronger and closer economic ties between China and the United States," he said.
BARGAINING CHIP
The IIF pointed out that the U.S. trade deficit is more of a political issue than an economic concern.
The Washington D.C.-based think tank found that the U.S. trade deficit has not deteriorated in the past decade. From 2006 to 2016, the U.S. deficit of goods trade decreased from 6 percent to 4 percent of its GDP. Considering its surplus in the service trade, the U.S. total trade deficit was only 2.7 percent of GDP in 2016.
The U.S. government may use the investigation as a bargaining chip to gain more access to China's service sector, advanced manufacturing and other industries with high added value, Zhang said.
The imbalance of U.S.-China trade was not built in one day, so it is unrealistic to expect it to be resolved overnight. "It takes time and we have to be patient," he said.
