Richard Nixon is remembered as the only American President that resigned to avoid the humiliation of impeachment.
Nixon quit the Presidency in 1974, after a Congress investigation related to a cover-up of illegal activities’ surveillance, during an electoral campaign and obstruction of justice
It was however during Richard Nixon’s presidency that a major international development took place that would change the shape of the world for the subsequent decades and as we know today.
As it happens frequently in American politics was a Republican President, who faced a hostile democratic majority led Congress that rendered his administration virtually ineffective in the control of domestic policies. Therefore Nixon decided to turn to international politics.
Since it became a communist regime country in 1949, after the Second World War, Mainland China was a pariah among nations, under diplomatic isolation and without a seat in the United Nations.
Notwithstanding the limits of his executive power, Nixon took an initiative of visiting the People’s Republic of China in 1972, a singular move that operated the dramatic change of advance of China’s influence and power over the of the world.
In 1979 the U.S. and China established diplomatic relations and signed a bilateral trade agreement.
It started with China making simple low-priced products, that were cheaper because American wages were higher, and US companies couldn’t compete or make a profit at the price China was charging.
This was seen by American companies as an opportunity to make higher profits although it meant sending countless manufacturing jobs to China and closing their American factories.
The outcome of the American shareholders’ greed signified that in a short time over 4500 American companies were manufacturing practically all range of products for the American market, which led to the rapid growth of trade between the two nations.
What started with a trade value of $ 4 billion US dollars in the early eighties grew to a colossal more than $ 600 billion in a variety of commodities, such as electrical equipment, machinery, household, toys, sports gear, and plastic goods.
Just as an idea of the profits that US companies can make, take as an example, the latest models of top of the range trade smart phones cost of manufacturing in China is an average of 350 US dollars to be sold in the US for over US 1700 dollars.
The consequences of Nixon’s action led to a new world trade order with the free-market economies declining while state-controlled economies like China gained dominance at most business levels.
It can be said that Nixon, unbeknown to him at the time, opened the floodgate of western bankruptcy and for China’s hegemony in international trade.