It's not appropriate to let China off the hook on currency.
In a piece in the New York Times, Eduardo Porter says that China's trade surplus with the rest of the world has "largely disappeared." And as a result, Treasury Secretary Tim Geithner will "have a harder time making the case that America’s trade deficit is somehow China’s fault" at this week's U.S.-China Strategic and Economic Dialogue (S&ED).
Porter overlooks a key point, however. The U.S. trade deicit with China reached a record $295 billion last year. Simply put, the United States is China's massive go-to market of last resort. In fact, China is now responsible for more than 70% of America's goods deficit with the rest of the world (excluding petroleum).
China has wisely geared its export strategy toward selling into the U.S. market. And thanks to mercantilist practices, including dumping, subsidies, and currency manipulation, they've succeeded in a big way.
Thus, while China may not being selling as much to the rest of the world, it is doing great, profitable business at the expense of U.S. manufacturers and their workers.
Contrary to Porter's views, addressing China's curency misalignment should be prominently addressed at the S&ED.
Related recent Blogs
- VIDEO: Concerns about America's defense industrial base • by scapozzola • 05/22/2013
- CNBC: China investing in U.S. • by scapozzola • 05/22/2013
- In Indiana, ongoing concerns about subsidized auto parts from China and Japan • by scapozzola • 05/22/2013
- RADIO: AAM's Scott Paul on Leslie Marshall Radio Show, May 20, 2013 • by scapozzola • 05/21/2013
- May 21, 2013 Headlines: Tensions with North Korea, a stronger WTO, and more. • by LRaup • 05/21/2013
- Shoring up our security means addressing the China challenge • by mmcmullan • 05/20/2013
- Quote of the Day from Caterpillar's Doug Oberhelman • by LDonia • 05/20/2013
- May 20, 2013 Headlines: Manufacturing & social media, growth of the U.S. economy, and more. • by LRaup • 05/20/2013
- President Obama visits Baltimore factory to promote infrastructure investment as a means of revitalizing the middle class • by LDonia • 05/17/2013
- May 17, 2013 Headlines: Strengthening our national security, focusing on jobs, and more. • by LRaup • 05/17/2013