Could oil prices cause the U.S. trade deficit with China to correct itself?

[King]

I've been thinking, if the price of oil continues to rise, would it eventually lead to an economic boom back in the United States?

SCENARIO:  All the companies who relocated manufacturing operations to Asia would see shipping prices soar due to the high cost of oil, thus making the cheap labor (and low quality products) no longer worth the hassle as transporting these products from Beijing to Los Angeles is now costing more than the money they are saving by producing in foreign lands.  They would then try to save their asses by relocating back into the United States.  Inversely, the Chinese economy may still demand modern conveniences and with these companies all but gone, they will now start to become a consuming nation instead of a producing one and attempt to buy its products from America.

[Albus Dumbledore]

You forgot the part about China falling apart into mad max land level insanity. The US/China trade drying up suddenly due to peak oil would destroy the chinese economy to the point where it wouldn't recover for many decades.

[Judäischen Volksfront]

No. They'll simply relocate to Mexico or Central America where wages are still much lower than in Ohio or Michigan. Any idea that high fuel prices will *help* the US economy is like the broken window fallacy.

[War on Want]

No. They'll simply relocate to Mexico or Central America where wages are still much lower than in Ohio or Michigan. Any idea that high fuel prices will *help* the US economy is like the broken window fallacy.

I think that will be much better though. I think we could see a major trading/alliance bloc between us and all of central america.

[True Federalist]

Not only that, but if we can get the Mexican and Central American economies really going, it will help reduce illegal immigration in a way no fence can hope to match.

[opebo]

If oil prices got high enough to make manufacturing senseless in ultra-low wage China compared with manufacturing in the US, civilization would have long since ended.  I mean the price would have to be so high our society would have long since ceased to function.

[Torie]

Transportation costs except for bulk goods are de minimus, so no, it won't have any effect. It will have an effect vis a vis hauling iron ore around, and grain, and maybe even autos to some extent. That is not what China imports into the US.

Edit: Any product that consumes a lot of energy to fabricate however, might be impacted. If the oil input becomes much more dear, the cost of labor becomes less of a factor. Anything that China fabricates and exports could be adversely affected, if the product consumes a lot of  energy to make. I am not sure what those products might be, but it is a factor separate and apart from transportation costs, and a potentially much more significant one.

[Senator Ben]

No; I don't think it'll be enough.  Other stuff will need to happen, also.