President must take a clear message to China that trade imbalance is out of control

President Bush will spend almost a week in Asia, which is a long time in terms of presidential travel, but might not be enough time to undo five years during which the administration's international focus was on who was or wasn't helping in the global war on terrorism.
The U.S. preoccupation with terrorism and the war in Iraq contributed to the lack of success last week when the president went to South America on a trade mission. Anti-U.S. protests got more coverage than the talks and the president came home with little to show for his efforts.
The Asian trip is going to have to be different. The stakes, frankly, are much higher.
Coming off another month of record U.S. trade deficits -- $66 billion in September -- it is time for the administration to get serious about the hemorrhage of dollars. While it is true that much of the trade imbalance can be attributed to record high oil imports, the deficit with China jumped 8.9 percent to a record $20.1 billion in September.
That's $20 billion in toys, televisions, steel, clothing and assorted bric-a-brac that Americans bought from China -- over and above the value of whatever China may have bought from the United States.
The total trade deficit is on track to exceed $700 billion for the year, a record. The deficit with China will exceed $200 billion, which is about 25 percent higher than last year's record.
China sets the pace
Meanwhile, China continues to set its own slow pace in correcting the under-valuation of the yuan against the dollar and continues to dawdle in cracking down on the billions of dollars in theft of intellectual property belonging to U.S. companies.
The trade figures were released by the Commerce Department and reported on last week. Here's a prediction based on a report by China's National Bureau of Statistics this week: the deficit will get worse.
Why? Excess capacity in China's steel industry is likely to exceed 100 million tons this year and by 2008 that excess will more than double. Meanwhile, China's auto production capacity could be twice the country's actual demand by the end of 2010.
And just what will China try to do with millions of tons of excess steel and hundreds of thousands of excess autos? It will do everything it can to export them to the United States, just as it does now with hundreds of billions of dollars worth of durable and consumer goods.
What President Bush does during his visits to Japan, South Korean and Mongolia will be important. But his most important stop will be in China. If he doesn't send a strong message there that a more equitable trading relationship is needed between China and the United States, very little else will matter.
Huge trade deficits have a cumulative effect on the overall economy. Some segments are impacted more acutely than others. The very survival of the textile industry is threatened today. The steel industry will be under atttack next. The auto industry could be endangered in the future.
President Bush must get tough with China now.