China is Buying America
You may ask how does the trade deficit with China lead to higher housing costs? For the seventh year in a row, the Chinese were the largest foreign buyers of U.S. real estate. In 2018, foreign purchasers bought 266,800 properties in the United States worth $121 billion. More than $20 billion came from China. That is one way China recycles its surplus of U.S. dollars: it is buying America.China's purchases of homes have focused on California where housing costs have become unaffordable for most workers.
China is not just buying homes, it is buying U.S. companies. Chinese companies attempted to buy the Chicago Stock Exchange, but were stopped by the U.S. Securities and Exchange Commission. However, Chinese investors have taken over the following iconic U.S. companies:
AMC movie theaters;
Legendary Entertainment Group;
Strategic Hotels and Resorts;
IBM Personal Computers (now Lenovo);
President Nixon opened the door to China trade, but access to the World Trade Organization blew out all of the doors and windows. We have lost five million manufacturing jobs to China, hollowing out industries in Ohio, Pennsylvania, Michigan, Wisconsin and other states the same states that put Donald Trump in the White House.
It Is Not Just China
Republicans are not the only party to blame. Bill Clinton ran against NAFTA, the North American Free Trade Agreement, but signed it into law. NAFTA went into effect in 1993. In 1990, Mexico manufactured only 500,000 cars. Last year, Mexico produced about four million cars surpassing the U.S. auto industry. Mexico's population is 40% of the U.S. population, so it produces about three times as many cars per capita as the United States. The new United States Mexico Canada Agreement will not help.
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