Editor's Note: Christopher Alessi is an associate staff writer at CFR.org. This is an Analysis Brief, reprinted with the permission of the Council on Foreign Relations.
By Christopher Alessi, CFR.org
The U.S. Senate passed legislation on Tuesday that would tax the goods of countries with "misaligned" currencies (WSJ). The bipartisan measure is meant to target China, a trading partner the United States has routinely criticized for devaluing its currency. China warned that such a move could instigate a trade war (BBC) between the two nations, threatening the global economy.
U.S. officials have argued that by artificially holding down the yuan, China is keeping its exports inexpensive for U.S. consumers, thus undermining the U.S. manufacturing sector. The measure has gained traction because of the perception that China's alleged unfair trade advantage (NYT) is costing U.S. jobs and contributing to an already-bleak employment outlook.
Leaders in the House of Representatives have voiced opposition (Politico) to the bill, indicating the measure is unlikely to be taken up in the lower chamber. The White House has not taken an official stance on the bill, but cautioned that it could be inconsistent with World Trade Organization rules.
Still, the measure is "very significant" from a symbolic point of view, explains CFR senior fellow Edward Alden, who says the Senate's action gives voice to growing U.S. frustration over China's currency and trade policies. Indeed, the United States posted a trade deficit of $273.1 billion (Guardian) with China last year. U.S. critics contend the yuan is undervalued by as much as 40 percent. Officials in Beijing argue that U.S. economic policy is to blame for the imbalance, noting that the yuan has appreciated (Bloomberg) by 25 percent since China removed its peg to the dollar in 2005.
A recent study (PDF) examining the effects of Chinese competition on local U.S. labor markets between 1990 and 2007 found regions with the greatest exposure to Chinese imports saw manufacturing employment decline by one-third more than regions with limited exposure.
Read: How Should the United States Address Chinese Trade Imbalance?
The authors concluded that higher exposure to China also led to larger increases in unemployment and other government benefits, making the overall U.S. economy less efficient and competitive. While one of the authors, Gordon Hanson of the University of California at San Diego, thinks the gross impact (CSM) of trade with China is positive, he says the research demonstrates "just how bad conditions are for low-skilled workers in the U.S."
However, CFR's Alden says that if the Senate bill became law, the United States would likely be subject to retaliatory measures from China, the largest holder of U.S. debt. Beijing has already warned that in addition to sparking a trade war, unilateral action by the United States could undermine bilateral relations (Bloomberg) on other fronts, including cooperation on dismantling North Korea's nuclear weapons program.
Advocates of the legislation, including Senator Charles Schumer (D-NY), argue that it would force China to allow its currency to appreciate significantly faster, creating more than two million U.S. jobs (Politico). Opponents, like House Speaker John Boehner (R-OH), say the legislation is "dangerous" and predict an inevitable trade fallout with Beijing.
Read: Confronting the China-U.S. Economic Imbalance.
Analysts tend to agree the bill would not do much to advance U.S. economic interests–or U.S. ties with China. It could "prompt China to slow or stop yuan appreciation to make a strong political statement that it will not be bullied–particularly not by a government that doesn't have its economic house in order," writes Dan Ikenson in Forbes.
Writing for Citywire, Chris Marshall notes that "restrictions against China could backfire directly on the U.S. economy." He cites ING economists who estimate that "retaliatory threats" from China could hit U.S. treasuries and destabilize global equity markets, shaking the confidence of an already-fragile global economy.
© 2012 Cable News Network. Turner Broadcasting System, Inc. All Rights Reserved.
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We all know since long about China's unethical mischivious trade practices. US got to be more concern about jobs and focus more on manufacturing and export. If China threaten with trade war than better to face it with courage and conviction rather than tolerating their manupulated export gimmicks and suffer economically. Good Leader stcik to the truth and take right decision on what is right for there own country without harming other country dubiously.
What is this "unethical mischivious trade practices" I keep hearing you people talk about it but never give an example of it. What? Is exporting more stuff to the US and buying less "unethical." no wonder americans are a bunch of idiots, Talk free market but when it goes against you, you on a rage quit
Unethical – deceptive manufacturing processes that "guarantee" quality but do not ensure it, use of political prisoners for slave labor, forced migration of Chinese citizens from villages to industrial environmental wastelands, artificially devalued currency exchange rates, support for Sudan's war on Darfuris, oppression of religious and ethnic minorities, corporate and military espionage, to name a few.
Unethical – deceptive manufacturing processes that "guarantee" quality but do not ensure it–that's the seller not the manufacturer.
use of political prisoners for slave labor-have you seen a US criminal system? Those telemarketers aren't indian
forced migration of Chinese citizens from villages to industrial environmental wastelands-US v. Kelo
artificially devalued currency exchange rates–us been doing it for years
, support for Sudan's war on Darfuris–US supported Egypt and now muslims are killing Christians
oppression of religious and ethnic minorities-blacks and muslims in the US
corporate and military espionage–lol the US has no spies?
plain and simple, you're a naive fool
your surname reveals your ignorance
If you can't see that China's currency manipulation is egregiously protectionist and anti free trade, what's the point of trying to communicate with you?
China uses the gains from their trade surplus to buy more US currency, flooding the currency markets with RMB while reducing the supply of dollars. This puts upward pressure on the exchange rate of dollars for RMB, exacerbating the trade imbalance and providing the means for China to do more of the same. They agreed to stop doing this as a condition of joining the WTO. They haven't stopped. Unethical enough for you?
Most of your points equating the US and China are not valid. You can look at any nation in history and make similar equations. Unethical is a perception. A vast majority of people cannot possibly fathom the weight of the decisions it takes to run a nation, especially one like ours. World politics has it's own code of ethics that would be considered atrocious by the average person but is actually a necessity in managing millions of people. The reality is, all things are relative. It is not a question of what the US government has done or hasn't done. It is a matter of those actions relative to history. History shows pretty much every nation has committed acts that would be considered unethical, especially by today's unrealistic standards. But can you really compare Kelo vs New London, which is what I am guessing you meant, to the Chinese forcing millions of it's citizens into industrialized slave labor? On the scale of relativity, they are not even close.
So Marc L from NY, what you're saying is you're comparing china's history to the US history and since all countries produced evil in the past, the chinese should be blamed and the Americans should get a free pass? hmm ok. I guess so
p.s. China might be doing it on a larger scale but if the US isn't china then why are they doing it at all? Funny fact, after the supreme court liberals kicked all the people out of their home the company decided to move somewhere else. So we basically have a large plot of land, a bunch of homeless people, and no new company. Nice
know it all: so the manufacturer has no responsibility for the quality and safety of their products, like milk and toys?
I'm not sure about the telemarketers thing, but if I were in prison, I'd rather be a telemarketer than locked in my cage all day. (And by the way, I think there are more Indian telemarketers than prisoner telemarketers)
I don't know how you could compare Chinese actions in Dafur with US actions in Egypt. China's actions stirred, and continue to stir war in Dafur and other countries in Africa. US actions in Egypt were an attempt to stablize the region.
Oppression of religion and minorities in the US do not compare with what is done in China. Tibet and Xizhang are showcases for minority oppression of both.
Note that I did not talk about the other topics, since unlike some others, I don't talk about things I don't know much about.
Nimen zhongguo ren yi zhi luan shuo! Zhen tao yan!
ALL governments are bullcrap the people outnumber them and their soldiers by far. There is somthing terribly wrong in the world today and its called politicians. All politicians should be hung for the highest of crimes in all countries. They never have or had any ones best interest at heart but their own. Everyone should rise up and remove all politicians from power.
Free Trade = Fair Trade. The value of the goods we import should be matched equally by the value of the goods we export. Anything else is not fair trade. China should be held to this, even if it means some short term suffering by our citizens. Somebody needs to tighten the leash on China.
"talk free market but when it goes against you, you on a rage quit"
But that's the essence of the problem, China's manipulating their currency on world markets does not allow for a true free market.
On the other hand, after two decades of looking the other way while taking advantage of a cheap labor market we can not expect China to revalue their currency overnight. That would be a disaster for their economy.
The Bill's point of view aims at the wrong target. The aim should be to open China to American products. China imports to USA affected by the passing of this bill will not create jobs in USA. The jobs will be created in a any number of underdeveloped countries willing to pick-up the manufacturing slack. This is yet another example of externalizing responsibility for internal faults. China will sort itself out, they need to maintain a steady growth rate, and I say good luck with that. We buy shoes and want to sell them cars in return, all the while the rural population in China dwindles to overcrowding cities where a moped is a more viable mode of transportation. We should be fighting to make the opening of the Chinese markets to American products an attractive option for China.
No possibility to "force" openness unless you have imperial control (see the 19th century). Current efforts at intellectual property rights = complete failure.
When China ends its obviously protectionist policies–artificially devalued currency and theft of other countries' IP for starters–then we can talk about normal trade relations designed further to address the trade and manufacturing imbalances.
There's truth in what you said. I would also advise strongly against a direct confrontation. The Chinese don't like to be confronted as they see it as an affront. Dialogues and deals are better solutions. The central government in Beijing understands the interdependence of our global economy and knows it wouldn't benefit them if we in the West are stuck in a quagmire.
Commerce means exchange. You sell me what you have and I sell you what I have, then a trade balance between us can be achieved. Now China sold what China has to US (shoes, clothes, electronics, furniture, toys......) and then, unbelievably, US REFUSED to sell what US has to China (weapons, technologies, corporations)! ! And these are the only things we have and these are the only things they eagerly need from US.
Of course, some may say these are related to country security and therefore not an option. Well......if you say so, WHAT ELSE can we sell to them? (fyi. Chinese gov is now strongly supporting their own car and airplane manufacture industry and even already exporting airplanes to some Asian countries)
If you don't make anything or export anything they need, and they are making everything you need, how can you expect a trade balance? And you really think this is all China's fault?
Right On, Victor.
You seem willingly to ignore China's protectionist trade policies. Why is that? Are you a troll?
why accuse of troll? the protectionism may be exaggerated
Have you visited there? Its full of foreign brands everywhere. I can't even think of hardly any chinese companies here. (product manufacture location is different, just tells me where the workers are, the vast majority of profits go to company execs and shareholders not workers, which is almost always US or other nonchinese owners)
your a dumbazz america makes jeans toys and bla bla bla.
they make it 30 times cheaper in price and quality and it just so happens that 99 percent of u.s. citizens cant afford the products we make no one can. Also china makes ALOT of weapons domestic. And our govt.can't sell or export private corps you moron cause they're private?!?!
"We all know since long about China's unethical mischiEvous trade practices."
It works both ways, however, you're only fed the propaganda [ie: this article] from one side. Sure, China may have some dubious practices, but the US is hardly a pillar of honesty and respectability. What we really need are our governments to quit posturing and work together. Being a US citizen, I don't see that happening from our side [see again: this article, and its responses]. I don't know enough about China to make an assessment there. Frankly, the entire US government needs flushed and rebuilt with the separation of corporation and state.
In case you missed it in the article, "dubious" trade practices hardly does justice to the 2.8 million jobs lost to China's protectionism targeted specifically at the US. In what way is the US protectionist (it's a real question–maybe there are some ways I'm unaware of)?
But you're right about flushing out the US government. A Congress corrupted by corporate campaign contributions (and now very likely by the Chinese government through the US-China Business Council) has allowed manufacturing in the US virtually to collapse.
idk, can you really blame china for being protectionist? If you have a country with people suffering and unemployed, wouldn't you care more about them than others? I guess this logic is too hard for obama and his goons to understand.
Lets talk foreign spending. Billions (with a "B") sent to peon countries like pakistan egypt israel iraq afganistan etc. etc. Now lets talk govt. pay, congress votes to give themselves raises for doing the worst job possible and gives the president one too. Now lets talk resources the u.s. consumes one third of the worlds known oil supply, whats gonna happen when theres two cars in every chinese garage (2 billion people). END GAME
You sound like a typical Indian kwok head who has zucked your uncle's dirty kwok one time too many and swallowed one mouthful too much. The problem is that you don't know you are full of it.
What is happening to the brains of our lawmakers!? First, they have paralysis… critical items cannot move through. Now, finally they have bi-partisan support to pass a bill… they passed a stupid disastrous bill.
Look, if this bill becomes law, we will have tariff wall against China and China will return the favor. So on one hand China will not sell products here, but these jobs are NOT coming back to US; the Chinese products will be replaced by products from other low-wage countries. On the other hand, we cannot export to China, thus losing more American jobs. So we have NET loss of American jobs. I thought they want to create more US jobs!???
Worst of all, America are initiating the process which will force the two largest economies of the world to both lose jobs… here comes the real global DEPRESSION. God bless us all??!!
當我們看中國的外交，卻發現她很多時會在違背自身價值觀和利益的情況下，向各國妥協。可見中國外交的失敗。
中共所實行的睦鄰政策，可說是徹底的失敗。中共現在的領導人奉行鄧小平那套所謂的「韜光養晦」政策。但其實，這只是一種逃避挑戰的鴕鳥政策。當今中國所面臨的惡劣國際環境，則決定了這種鴕鳥政策必然失敗。
在這種鴕鳥政策主導下，中國外交不僅畏首畏尾，更胸無大志，既沒有系統的外交戰略，也沒有長遠的外交目標。
這種頭痛醫頭、腳痛醫腳式的外交政策，直接導致中國外交在面對各種挑釁時束手無策，盡顯軟弱之態，面對大好機遇時，也因毫無戰略準備而無所作為。
對朝鮮對印度對日本甚至是越南，中國都是畏首畏尾，一昧退讓，實行韜光養晦。本來，鄧小平的韜光養晦，是指平時積蓄力量，關鍵時刻果斷出手，是一種積極進取的外交思維。但現在，卻成了一種鴕鳥政策，令人無奈。
其實，按照中國現在的實力，根本不用如此讓步，中共對東南亞國家，對日本，甚至是越南朝鮮，都讓得太多。完全顯示不到大國風範，畏首畏尾的外交政策，只會令中國人蒙羞！
至於對印度和越南的外交處理手法，中共簡直令人覺得恥辱。情況就好像當年清政府打贏法國，但仍然賠償法國一樣。令人覺得是絕大的恥辱。
中國在和日本，越南，俄羅斯，印度等列或者周遍強國的政治經濟往來中，沒有佔到多少便宜，也沒有讓這些列強放棄對中國崛起的偏見和敵視，自身利益不斷被侵占，不能不說中國的外交政策有很大缺陷，這是中國國家佈局計劃和外交政策慘敗的最佳體現。
中國常常想成為一等一的大國，但他的外交卻事事以懦弱的方式勉強了事，實在不能給人任何強國的風範。
I don't like Boehner much but have to agree with him on this one. US need China to deal with Iran and North Korea and can't risk jeopardizing the relationship. The bill wouldn't do much but start a trade war. Instead of dealing with China, we can deal with domestic corporations that are shipping jobs overseas and figure out how to reverse the trend.
By taxing foreign profits and using the revenue to offer tax breaks for corporations that move operations to the US.
No normalization of trade between the US and China is going to happen while China clings to its egregiously protectionist practices. If China refuses to let the yuan float and refuses to crack down on IP theft, then we should implement retaliatory tariffs. We should also implement tariffs to address our incremental costs of US manufacturing's compliance with environmental protection and worker protections and benefits legislation.
Nope. The US already loss. Funding pointless wars without compensation=disaster. You can invade all the middle eastern countries you want, but you will never get its oil or mineral. Libya? We gave them 2 billion, in return, they gave china an oil lease.
Syria? We'll invade them next and get nothing in return. Are we really this stupid? Look at China, why are they the only country to be recession proof? Because they're focusing on infrastructure and export.
All we do is build infrastructure in the middle east for terrorists to bomb it up
America is stuck with stupid policy like educating dropouts into hitech soldiers.
Or educating foreigners to compete with USA.
I don't usually post but people are crazy. This is what china has wanted all along. What china going to do if Iran or North korea start a fight. Nothing.
Secondly, why do we keep taking the position that "we can't have a trade war with china" Why not. Do you think they want to lose the demand america provides. NOPE. That why the trade defiecit is so high and we two stupid to do anything about it.
Wrong. History has proven that The Tougher the Challenge, The Better China Likes It and grow, grow, grow................
The history also show if we leave China to its own game, it will self destuct.
what's the us going to do when iran and north korea start fighting? Fight back, waste the economy, and put terrorists in power? i.e. libya
Are we going to move back all the shoe, pot and pan factories back to USA? And then what? Who is going to buy them?
You should first ask who will make them? Who would like to get $2/day salary to work 12hrs each day to make them? The answer is still 'no one here but Chinese over there'. If yuan is appreciated enough by our proposal here, the answer then becomes 'no one here but Vietnum/Malysia/Mexico/Tailand......' Oh, almost forgot... Plus a trade war with China...
China plays dirty. Do you think the Chinese Governtment doesn't know about all the counterfeiting ?
All Chinese counterfeit products intercepted at our ports should be shipped back to China and given for free to the Chinese people.
Great idea... Let's create a bill that will increase the cost of goods on Americans during a time when they have less money to spend. Real economic geniuses at work on this one.
This is an example of politicians trying to use China as a scapegoat for their own incompetency rather than working to fix the real problems here at home.
excellent post, Josh. You make a point that not many have talked about here but was the first thing to come to my mind. Let the US consumer fight the trade war with China, thank you Washington.
Commerce means exchange. You sell me what you have and I sell you what I have, then a trade balance between us can be achieved. Now China sold what China has to US (shoes, clothes, electronics, furniture, toys......) and then, unbelievably, US REFUSED to sell what US has to China (weapons, technologies, corporations)! ! And these are the only things we have and these are the only things they eagerly need from US.
Of course, some may say these are related to country security and therefore not an option. Well......if you say so, WHAT ELSE can we sell to them? (fyi. Chinese gov is now strongly supporting their own car and airplane manufacture industry and even already exporting airplanes to some Asian countries; Also they already corner the global market of clean energy industry)
If you don't make anything or export anything they need, and they are making everything you need, how can you expect a trade balance? And you really think this is all China's fault?
(Seems the only thing we allow them to purchase with the dollars they made from us is our debt, which will devaluate by what we are proposing here......poor hard-working Chinese people......)
Victor, why do you insist on saying "we" Americans? You're obviously Chinese. No American would suggest that we sell weapons to China, unless they're insane. Are you insane?
If we sell to everyone else, so why not China?
So are you telling me that American made Kwok Head such as you should only be zucking your uncle's syphilistic kwok and not any Chinese kwok?
The chinese have no respect for IP rights. Everything is counterfiet. Bunch of liars who manipulate their currency to maintain their skewed rate of exports. China needs America more than america needs china. A trade war is exactly what we need. Bring manufacturing back to the good old USofA
Couldn't agree more. It's the only way out.
they're not stealing IP. Apple and the rest went to them. Or is that to hard for racists to understand?
You haven't read about fake apple stores? Chineese will counterfeit anything and their government does little to stop this practice which cheats legit companies out of a lot of money
I'm reminded of a song by Jane's Addiction called 'Idiots Rule'. Look up the Smoot-Hawley Act – this has been done before, producing one of the most epic failures in US economic history. This is so similar they shoulda called it 'Smoot-Hawley 2'. It might be instructive to check the fate of the Republicans Smoot and Hawley – first election they were tossed so hard they bounced....
Why did the US Congress ratify China's accession to the WTO without first requiring China to allow the yuan to float? Because Congress was bribed by US corporations eager to access China's markets and eager to dump US manufacturing costs (wages and benefits, environmental protections, other US regulations). Why does the WTO not require the yuan to float as a condition of continued Chinese membership? I don't know the details, but one can be sure that someone's pockets are getting lined.
Congress has gotten us into this mess and now continues to dither about getting us out. Obviously the Democrats are going to blame the House Republicans. But where were the Democrats on this issue 2 or 3 years ago when they controlled both Houses? The Democrats are as hopelessly corrupt as the Republicans.
free trade is not free at all, are you all blind???... Despite what the banks make us believe... the USA cannot default, WE print our own money, we just have to print more & de-valuate the dollar if so WE choose. Who cares if China is not subscribing the US debt. We have natural resources, food, and millions of people ready to get back to work if supplies of goods from China stop. So.... PASS the legislation on Duties!!! It's time to rebuild what few sharks have destroyed: AMERICA!!!
Duties on import are a good source of revenue, based on spending abilities. You buy... you pay. S let's cut this crap. Again... we have natural resources, millions of people that need to get back to work... lets put those Duties in place!!!
I heartily agree. No mutually beneficial trade relations are possible while China maintains protectionist monetary policies or continues lawlessly to steal US intellectual property.
Did China also lawlessly steal your virginity too? If it did, how do you feel about losing your virginity to China? Do you feel like your azz needs greasing to prevent soreness?
I understand a lot of this..... Being and HB major and EC minor, trade war wouldn't be good. We (china and the U.S.) are going to hurt the global economy. Lets stop fighting.... can we produce your farming equipment and seeds to feed your people (MSU) if you produce our cars?
I agree that a trade war is undesirable. However, we're already in one due to China's protectionism. By "protectionism" I mean currency manipulation and theft of US' (and other countries') intellectual property. When trading partners drop protectionism, then trade becomes desirable for each.
Kwok head, you must be born yesterday. If currency manuipulation is the only problem, why can't your useless uncle manuipulates his currency too? Is he too fat and lazy that he wants the Chinese to manuipulate it for him?
How can U.S. politicians be so utterly stupid? The problem here is that China has a billion workers glad to earn $0.50/hr. We've raised them out of poverty and destroyed our system in the process. Unless these morons are willing to put a near-total embargo on China and India both, the game is over.
I can hardly believe it either. But if it looks like a duck and walks like a duck, it must be a duck. Congress is traitorously corrupt.
You may call them ducks but I call them useless Kwok Heads. Next time when you BS about the U.S. being the biggest democracy in the world, remember I say this: the U.S. is not a democracy, it is a demo-of crazy
You forgot to mention that there are millions of American kwok heads such as you who are glad to be paid 50 cents by their uncle to have their azz fingered.
We cannot count on our "leaders" whatsoever. These people are a joke and the game is up. Get the fuk out of office you traitors. Who does the US govt work for exactly? It isn't Americans. It is time for all out civil war against this government to remove them from power.
I share your disdain for the US government. Maybe a miracle will occur and government will begin on its own to respond to the People's demands. If not, then a shooting revolution becomes more likely. On the other hand, maybe it's time for the Joint Chiefs to weigh in on this matter.
I'm in full support of this legislation, however, it takes a lot more than this to stop China's economic invasion, and to rebuild the US economy as a whole.
Fair enough. But it's a reasonable place to begin.
I don't think manufacturing BS artists/kwok head such as you here in the U.S. will do anything to the econonmy.
I'll move my investments out of China when Obama loses in 2012....till then, the Chinese will play Obama and Co. like a fiddle. They know nothing will happen – Obama is too weak and has brought the US to its knees. At the moment, the Chinese have the upper hand.
Regrettably, you're right. Obama is astonishingly weak and Congress is hopelessly corrupt.
If you've got "investments" in China you are more responsible than Obama is for weakening the U.S.
ALL of you "investors"(profiteers) are the ones who have wrecked the economy of the U.S.
In 1929, Russia screwed the whole world up. Today, China is doing the same, if not worst.
We are at war, folks, let's skip the bs and get into actions.
Are you telling me that China is screwing you? Are you bending over and have four limbs on the floor with China behind you at this moment?
Never in the history of the United States have so many [300M ordinary citizens] been betrayed by so few [535 members of Congress].
Nothing will ever change until campaigns are no longer funded by major corps. The DEMS and REPS that the people get to vote on are picked by the people with money to finance campaigns. Problem is the people that make the rules are benifiting from the current system. Life time health care for example.
CNN SUCKS BIG TIME. BLOCKING COMMENTS. I know, their game , their rules.
We welcome china rise in the world but also ask it as to what part of FREE TRADE it does not understand.
China was promising ever since it became a WTO member, to float the Yuan but refused so far.
It has used the Yuan manipulation to attract manufacturing jobs to it and to get massive trade surpluses.
FREE TRADE means free Yuan, free imports just like it exports, etc
So please float your Yuan and we Americans will compete equally.
Lets see who wins.
Screw china they are all bluff. If we didn't buy their crap who would? They need us a whole lot more than we need them.Like any communist country the only way they keep themselves in power is by paying the military so much. If we didn't buy their goods they wouldn't have so much to pay out and when they had another Tiannamien sq. the military wouldn't stop it.
1 question push over your entire rant!
WTH does the US have the world's largest military!?!?!? And the military is living off debt!
Get educated before ranting nonsense.
Corporate America's expansion into China was paid for by the American taxpayer. Bush's “tax cuts for the rich” policy helped to fund this transition. That's why no American jobs were created but a lot of Chinese jobs were. Republican politicians represent the corporate rich, the 'job creators'. When was the last time you saw a job created in the U.S.? The rich don't pay tax in this country and their corporations are physically based in communist China; where, by the way, SOCIALIZED healthcare and SOCIALIZED education are the norm and ALL the banks are state owned. These former American companies only pay tax in China, supporting a growing communist government and military. Republican politicians sold us (U.S.) out. These guys aren't batting for us (U.S.) anymore.
Of all the posts here, yours is the most accurate discription of what is really going on. Congradulations Kweg Yung. By the way, I was just " forced retired" after 39 years, by the USA company I use to work for because they moved my job to China. How nice of them ! Some day I pray that China shows my company who is the boss and throws them out at gunpoint.
Why the cap on socialist, you realize all political ideals... are just ideals, like demacracy in the US is screwing the middle class over.
That is certainly one way to look at it. And because it's irrefutable it begs the question "How could the US government be so stupid as do that to their people?" Well, they're not. It's all part of the plan. Well ok, the China part of it backfired a little, and that's why there's a little bit of animosity. But it's all under control and doors to Korea, Panama, etc have now been opened.
Undervalued export business of China has been gulped by USA leading to a state of indigestion. Now since uncontrollable,vomiting is must for first stage relief .Hence Enforcement of bill is must without much of debates at this stage.Considering the degree of financial influence and especially the trust in global market as well as the international political supports enjoyed by both countries as on date, any real retaliation from China is highly unlikely.
What this debacle reveals, is the problem seldom if ever mentioned, is the trading incompatibility of wealthy societies, which for centuries poured their wealth into the strength of their curriences and of social structures based on that wealth, with new economies and societies, which not have done so, and who want fast growth! As a result of this quantum, cosmic imbalance, America is shamefully shortchanged by China, which is of the latter case a classic example! The crux comes precisely to the currency imbalance: one society worked centuries to get a currency advantage (strong currency). The other, had zero currency under Communism ... but now is ready to destroy what America worked for for centuries! Shame, shame, shame. How could the globalists nopt have foreseen that? I am a theologian who have never studied economy, but things as these are obvious to me! I probably deserve a doctorate from Harvard.
Thankfully there finally addressing this. Our economic downturn has more to do with China that it has to do with government corruption. They can build and sell everything far cheaper then our companies can because their workers get paid nothing, and they don't get benefits. How can American companies compete with China where their worker's get paid two dollars an hour and our workers get 20-30 an hour? There beating America at its own game, capitalism.
The article states that the Congress is taking this action because a lower yuan is hurting our manufacturing base. What manufacturing base? What are they thinking? Are they simply in denial that they destroyed our manufacturing base years ago with all their Fair Trade Agreements. And besides, is it really smart to start a trade war with China? Their economy is much stronger than ours; we'll lose.
If Chinese imports become more expensive and US exports become cheaper, that doesn't decrease our trade deficit, it increases it. And the idea that this will be offset by increased demand for US products is incredibly stupid. A large percentage (over 60%) of US exports to China are inputs to export, which means we send them components or raw materials like cotton, and they send us back finished goods, like iPhones or clothing. If clothing from China becomes more expensive, that will reduce demand, which will then reduce demand for US cotton. This is basic economics.
Of course devaluation of the dollar isn't really about trade...that is just a smoke screen. The US wants to devalue the dollar as a debt reduction strategy. If the dollar loses 25-40% of its value, that means we will effectively owe 25-40% less to anyone currently holding our debt. The problem is, this will also effectively reduce any savings Americans have by the same amount. I don't know about anyone else, but I'm not too eager to watch 40% of my savings vanish into thin air.
Just aiming. Won't dare to fire.
What is happening to the brains of our lawmakers!? First, they have paralysis… critical items cannot move through. Now, finally they have bi-partisan support to pass a bill… they passed a stupid disastrous bill.
Look, if this bill becomes law, we will have tariff wall against China and China will return the favor. So on one hand China will not sell products here, but these jobs are NOT coming back to US; the Chinese products will be replaced by products from other low-wage countries. On the other hand, we cannot export to China, thus losing more American jobs. So we have NET loss of American jobs. I thought they want to create more US jobs!???
Worst of all, as if the global financial crisis of 2008 devised by Wall Street greedy idiots is not enough, the brilliant US senators want to finish the job by initiating the process which will force the two largest economies of the world to both lose jobs… here comes the real global DEPRESSION. God bless us all??!!
Why anybody in his/her right mind would design such a self-defeating punishment tool!!
Why not? If it musters some nationalistic sentiments in the electorate and wins votes, keeps you in power, who cares???
The most powerful force on the planet is the US CONSUMER and only because USA is the most populated advanced ecomony.
US consumers voted in every administration good and bad
US consumer built China. No you couldnt build your factories in SE Asia, Central America etc... in little countries that would never rival USA. Why?? US consumer demanded cheaper goods.
I thought Americans hated tax and loved free enterprise. Many goods dont have any import tax but those who do are a TAX that the US consumer will pay. Protectionism turned the ressesion of the 30's into a great depression, now we considr doing the same? Article stated 1990's was the start of USA imports of chinese goods by chance the same time USA entered into initial FTA's, Why blame the FTA's when it was not the cause of declining US manufacturing.
Mexico drugs??? do you think mexico made them and suddenly USA started buying them??? No, demand from the US Consumer started the cycle and is having devistating effects on your allies.
Now wall-street is your eminy??? Rubbish.
US Consumer are still the largest force on the planet.
Take some responsibility, learn from your mistakes, blame the real causes and fix them.
Obviously, your are crying all the way to the bank. You are part of the problem. I have already responded after this for your edification at length. Let me just say it is trusted companies we usually buy from where ever they source. These companies have a mandate to make a profit, nothing more. Like consumers that flocked over the border to Mexico to buy gas a $2.00 a gallon instead of $4 here, it is a simple matter of economic advantage, so companies have flocked to China, for instance, because their cheating has lowered commodity prices, lower labor, and pre-Teddy Roosvelt regulations that killed American worker regularly. Their doing exactly what you would expect. The cost of that however burdens every American as their percentage of a huge trade-deficit that must be paid on some day of settlement. Likewise, social costs associated with jobs gone are not free and are a tax on every American. There are indirect consequences like domestic business go out.
Since companies have a social conscience mainly for building their PR, they have virtually no social conscience. It is however government's job to see to its people's well-being. It is governments only currency. Failing that they are thown from office. In the case of the Arab Spring, they are toppled. The problem is the government has been coopted by corporate interests, and is now vested as members in the status quo. The government has let the people down, both parties in the name of free trade. Germany still maintains domestic jobs through industrialization and is still a net exporter. We could be too, if our government had a strong, definitive "national industrial policy" that did so. All your whinning is possibly because you have bought hook and sinker the philosophy we must run a continual negative trade-balance. That is sophistry plain and simple. Think about it.
Oh please enough of such stereotype boasts that Americans as stucked with.
USA Government is BANKRUPT! America's national debt of US$14 trillion would still be there – 20 years later.
Asia is now the biggest growing consumer market – and will become the largest in 5 years time. Because there are nearly 3 billion prospering consumers.
I repeat – British pound was yesterday's world currency, US$ is today – the future world currency is the Chinese Yuan.
Until Americans learn to be prudent and not buy houses or use their credit cards which they cant really afford – USA will continue to backslide. The current difficult financial situation is a good wake up call for your Americans. Start saving and be prudent, because your country is BROKE!
American bragging is no longer receiving any audience because the whole world knows now Americans are very poor!
Tarrifs are not the answer. Virtually everybody we have a negative trade-balance with represents American jobs gone elsewhere. The problem is we don't make enough of what we consume, or enough other stuff for export. We are an "unbalanced economy" We maintain our standard of living only by borrowing money as a nation running a huge negative trade-balance It is a dead end! It is not sustainable going further and further into debt. We need to neutrialize the negative trade-deficit. The only way we can do that is "produce" more here, and that will also mean robust American employment. It will return us to a solid, robust economy.
It fixes our problems in the short and long terms. Like Germany we can have an "industrial policy" that still provides industrial jobs to it citizens, and maintains itself as a net exporter. We have exported our technology and jobs for decades. It was camouflaged by the long lasting housing bubble. Now, we look around and the jobs are gone and the middle-class is disappearing. In the mean time, American "industrial production" has fallen of a cliff.
I say reduce taxes on domestic production over 5-years, while raising sharply taxes on foreign goods targeted to this market over 5-years. The fed. gov. can get with states to offer declining incentives to invest here over 5-years. These imported are not so cheap when you factor in the social costs of unimployment insurance food stamps, and medicade. Add to this the indirect social costs of people dropping car insurance, life insurance, and forgoing a lot of things, and Main Street businesses going out. All these unemployed people walking around are not free. Government only stays in power when the well-being of the masses are assured. Imported products are very expensive to this economy, indeed.
No, this isn't protectionism of the 30's. Jobs have not dried up, just gone elsewhere. The second largest economy in the world doesn't play by our rules and considers them irrelevant. We need a new set of rules that allow us to compete. We need an American "industrial policy" that enables us to win! Producing nations win, consuming nations become debtors.