Abstract
There has been a lot of debate in global politics about fair trade, surpluses (also called positive trade accounts), and deficits (negative trade accounts) among the USA, China and the European Union (EU). The study aims to analyse the countries’ trade accounts through the lenses of international finance theory. Based on financial analytical models, the countries’ competitiveness and changes in their net foreign wealth were examined. The factors considered in the literature review are as follows: exchange rate, government tariff and tax policies, saving rate, manufacturing base, investments, natural resource abundance and others. The computation of the trade accounts was conducted using the ten-year international trade data (2009–2018) for the EU-28 member countries that became the main importer for China instead of the USA in 2019. The con ducted empirical research showed that Chinese trade has continuous deficits throughout European countries, and in some countries, it could be considered as an increasingly important structural issue (for example, in Poland and the Czech Republic). Trade with the USA, in turn, typically produces surplus for European countries, where Germany is the leader. The provided conclusions hold value for international trade managers in terms of their potential influence on public policy in the researched countries. In light of the financial crisis, the current export shock could be used by countries as an occasion to change the course and depart from the assumptions, which do not advocate for free trade.
Highlights
For a long time, there existed a global consensus that free trade and low customs tariffs are the ultimate goals of global economy and growth
The current account as the subject was examined through the analysis of secondary documents, reports, concepts, journals, books, databases of the World Bank, Statistical Communiqué of the People’s Republic of China, United Nations Conference on Trade and Development (UNCTAD), Eurostat, and United Nations (UN) Comtrade
Our analysis looks into the side of a trade surplus, which reflects country competitiveness [20]
Summary
There existed a global consensus that free trade and low customs tariffs are the ultimate goals of global economy and growth. After the global financial crisis (2008– 2009) the situation has changed little by little, and, in recent year, the world has witnessed the reappearance of trade hostilities, and the probability of long-term trade wars has increased. The disputes have mostly been between the United States of America (USA) and China [1, 2], but others exist. Japan and South Korea have been arguing with each other in recent years, and they have both imposed sanctions, import/export bans and higher custom tariffs to each other 1. United States was having trade disputes with Mexico and Canada over the 1990s, and signed a free trade agreement called the
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