Not all politicians are on the same page.
Speaker of the House John Boehner commented that the bill seems "dangerous" and will probably not pass in the Republican-controlled House. President Obama, on the other hand, is rather ambiguous and has yet to take a firm stance on either side. However, he warned last week that he does not want to pass a bill that is inconsistent with international trade rules and will likely be rejected by the WTO.
China's Vice Foreign Trade Minister, Cui Tiankai, has warned that if this proposed measure is made into law, "the result would be a trade war... [and] it would be detrimental to the development of economic ties and might have an adverse impact on bilateral relations".
Personally, I found quite a few problems with this bill.
First, I think this bill is far too risky. If dramatic trade tensions arises with our second largest trading partner (Canada is first), it would shatter and set back our already fragile recovery from the last dip.
Second, how are we to determine which countries have undervalued currencies? If we come up with some unbalanced model that mainly targets China, China will obviously take offense and aggressively retaliate with their own measures (similar to the previously mentioned issue). Keep in mind that China holds around $900 billion in US treasury securities and that the US owes China a hundred billion dollars in trade debt.
Lastly, will this help out average American citizens? Sure, the passage of this bill will dramatically decrease the US trade deficit to China. But at the same time, tariffs will jack up the price of the infamously low-priced "Made-in-China" products. The average American will be the ones to, once again, take on the burden.
2 comments:
I agree with you Michelle. America is famous for its "Made in China" products and existence of this bill merely serves to target China. I feel it is rather hypocritical of the United States to accuse China of manipulating currency when the United States is trying to inflate its own currency. It is also really obvious to China that this bill is targeting their economy and policy. America should stop acting in its own self-interest because these types of policies will only come back to hurt the economy.
I agree with both Michelle and Alice. I think that the average american does not carry how much a country inflates their currency but whether they can get what they need and make the bills without going in debt. I think if America wants to combat the manipulation of currency by countries like China, that they should try a way to do it without affecting the average american. I also think that they should combat other countries and not just China, which is one of our main trading partners.
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