The figure reported in the Feb. 7 Economy & Business article “Trade deficit with China hits record high of $375 billion” was quite misleading, for it failed to take account of the fact that many products imported from China contain components from other countries and are treated as of Chinese origin for statistical purposes.
An analysis a few years ago of the iPhone 3G showed that none of the components was Chinese and that the only value added in China was the $6.50 cost of assembly. Yet its full value of several hundred dollars would been included in the apparent deficit with China. An analysis of the iPhone 6G showed that it contained some Chinese components, but that many of the major components — display, camera, storage, memory and processor — came from Japan or Korea. Studies by the Organization for Economic Cooperation and Development and others have shown that the true U.S. deficit with China, based on the value added in China, is between a third and a half of the reported figure — still large but nowhere near $375 billion.
Patrick Macrory, Washington