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On March 22, 2010 the Washington Post published an informative article about America's trade dispute with China.
It seems that a big part of the trade imbalance is due to the fact that 60 percent of China's exports are from US companies who have established manufacturing in China to order to take advantage of cheap Chinese labor. These US companies then export the goods to America.
The companies, of course, make large profits which boost Wall Street. The Chinese themselves make only a tiny profit of 1% to 1.7%. So a trade war would hurt American companies operating in China more than the Chinese themselves.
China's trade minister also says that part of the trade imbalance is caused by America's refusal to sell many high-tech items to China, which they would be happy to purchase. These include satellites, which they must buy from Europe when they would prefer to buy them from America.
Globalization means that slapping tariffs on goods made in China would simply increase the price of those goods in America and increase the chance that US companies would move their operations to another country. With the high cost of labor in America, companies are not likely to move these jobs back to the American people. They will simply move them to another country such as Mexico.
Tariffs are like putting a band-aid on a gunshot wound to the heart. The real problem is globalization itself, along with the GATT treaty and NAFTA, which opened the door to utilizing cheap labor from overseas. Once one company did it, all their competitors were forced to do the same in order to remain competitive. This has destroyed a huge section of US manufacturing, and those jobs simply moved to other countries.
We were told that this would be good for us in the long run. No politician attempted to define "good." If "good" means that it would increase profits from corporations outsourcing the jobs to other countries, then it has been a success. Wall Street is being blessed--at least until the American consumers run out of money to buy their goods made in other countries.
Someone forgot to reveal the dirty little secret, that one has to keep American consumers employed in order to maintain a customer base. As it stands, money tends to flow to China and to Wall Street companies, and Main Street struggles to find enough money to make a living.
The Prophetic Significance of the Trade Imbalance
Back in November of 1993 we launched the Jubilee Prayer Campaign, appealing to the Divine Court for the overthrow of Babylon on Nov. 29, 1993. We understood that we were going to see this patterned after Nebuchadnezzar's dream in Daniel 4, and that we were therefore to watch 12 months later (Nov. 29, 1994).
We saw the de-Foley-ation of Washington D.C. on that date, as the Babylonian "tree" was stripped of its leaves and chopped down with a lower cut ("Nethercutt", who defeated Tom Foley in the Senate election). Tom Foley resigned from the Senate immediately after passing the GATT treaty on Nov. 29, 1994.
This drew our attention to the fact that the idea of "free trade" was God's way of stripping Babylon of its "leaves" and would be the primary means of divine judgment upon the merchants of Babylon. We are seeing that come to pass more and more as time passes.
America's financial wizards worship the god of free trade, because God has blinded them to them to the consequences of their actions. They see only the corporate profits that are to be made by employing cheap labor overseas. And once the first company outsources the production, all others are forced to do so--or shut down altogether.
The government policy of free trade is the root of the problem. The Trade Unions have worked long to raise the standard of living for American workers, fighting for high wages, good health benefits, and generous pensions. Free trade undermines all of this, because companies who outsource to other countries usually can pay low wages, dish out NO health benefits, and set aside nothing for pensions.
Americans cannot compete with the rest of the world under those conditions. We cannot have it both ways. With globalization and free trade, we cannot have cheap goods and high wages at the same time. There is a seismic shift taking place as huge amounts of money shift from America and Europe to Asia. If left unchecked, this monetary shift will finally result in a global shift of technology and civilization itself.
Fortunately, there is a God who is running the universe. We understand from Scripture that this is God's way of bringing judgment upon the Babylonian system that has oppressed the world for thousands of years. God used "the kings of the east" to overthrow Babylon in ancient times. He is doing the same once again in our day. What looks bad is actually God's way of setting us free.
While the kings of the east may think that the 21st century will be THEIR time to dominate the world, they have a surprise awaiting them. They do not know that they are being used to prepare the ground for the Kingdom of God. I believe that the fall of Babylon will signal a new move of the Holy Spirit in the earth that will institute the Covenant of Marvels promised in Exodus 34:10,
And he said, Behold, I make a covenant: before all thy people I will do marvels, such as have not been done in all the earth, nor in any nation: and all the people among which thou [art] shall see the work of the LORD: for it [is] a terrible thing that I will do with thee.
I believe that we are being prepared for this time even now, and that it is reserved for the greatest outpouring of the Spirit ever seen in the earth. The best is yet to come. When I look at Babylon, I see doom and gloom. But when I look at the progression of the Kingdom, I am very much encouraged by what God is doing. We see evidence of answered prayer everywhere, though the work has taken longer than we had expected.