A trade war with China isn't worth it

[CHIMO]

The battle with the United States over China's exchange rate continues. When the recession began, many worried that protectionism would rear its ugly head. True, G20 leaders promised that they had learned the lessons of the Great Depression. But 17 of the G20's members introduced protectionist measures just months after the first summit in November 2008. The "buy America" provision in the United States' stimulus bill got the most attention. Still, protectionism was contained, partly due to the World Trade Organisation.

Continuing economic weakness in the advanced economies risks a new round of protectionism. In the US, for example, more than one in six workers who would like a full-time job can't find one.

These were among the risks associated with America's insufficient stimulus, which was designed to placate members of Congress as much as it was to revive the economy. With soaring deficits, a second stimulus appears unlikely, and, with monetary policy at its limits and inflation hawks being barely kept at bay, there is little hope of help from that department, either. So protectionism is taking pride of place.

The US treasury has been charged by Congress to assess whether China is a "currency manipulator". Although President Barack Obama has now delayed for some months when the treasury secretary, Timothy Geithner, must issue his report, the very concept of "currency manipulation" itself is flawed: all governments take actions that directly or indirectly affect the exchange rate. Reckless budget deficits can lead to a weak currency; so can low interest rates. Until the recent crisis in Greece, the US benefited from a weak dollar/euro exchange rate. Should Europeans have accused the US of "manipulating" the exchange rate to expand exports at its expense?


http://www.guardian.co.uk/commentisfree/cifamerica/2010/apr/07/united-states-china-currency-manipulation

[sendero]

1. Bullshit..

.... China is the only winner in the current situation. A trade war could only benefit America.

[protest_dude]

2. China & Africa

China is a huge force for good internationally.

They are supporting Zimbabwe and its redistribution of land to the native African people.

They are also building hospitals, schools, and paving roads in Sudan.

The morons running around saying "save Darfur" should stop raising money for Zionists and Oil Companies who want to recolonize Africa. They should support China, because China actually care about the African people.

China brought Railroads to Tanzania. The western capitalist system brings CIA assasins, christian nutjobs, and AIDS.

China has a lot of problems no doubt, but they seem to be on the right side internationally.

btw:

Why did Rachel Maddow demonize the DPRK donating a statue to Senegal? It was a beautiful statue, and it was a good thing to celebrate, INDEPENDENCE FOR COLONIZED PEOPLE!

Why didn't the Neo-Cons donate one to Senegal? Aren't they in support of "liberation"? I guess not. Unless its "liberation" to reconlonize people, and get rid of leaders who get in bankers way.

[Statistical]

3. Pure garbage.

China takes unprecedented and illegal actual to avoid Yuan to rise in value.

This artificially low Yuan makes all Chinese exports about 20% to 40% cheaper than they would be.

Chinese citizens lose because the Yuan they are paid in can't buy as much goods & services.
US companies lose because they have to face artificially lower prices (on top of ultra cheap labor)
Even US exporting companies lose because Chinese citizens are robbed of their purchasing power thus less demand for goods (imported or otherwise).

There are only two winners.
Chinese Central Govt - rapid & unsustainable economic growth on backs of the "losers".
American Consumers - cheap shit is even cheaper shit under this Policy.

China loses a trade war with US if the US is willing to enforce sanctions.

A tariff on all imports from countries using "extreme artificial interventions" to their currency is all that is needed. Make the tarriff 150% of the value of the manipulation. Chinese artificially devalue their exports 40% = 60% tarrif erasing their manipulation.

[angryfirelord]

4. Only in an extreme case would I agree

For instance, if we proposed to levy a 100% tariff on all Chinese imports, yes, that would be a problem. However, China really only has one thing going for itself: Cheap labor. Yes, China does have a lot of raw materials, but they can't be utilized overnight. For the short-term period, we have leverage since we are buying a large percentage of their goods. We should be calling out China for their blatant currency manipulation.