The Senate just passed a bill (65 to 35) that "would allow any 'fundamentally misaligned' currency to be labelled a subsidy to countervailing duties." Which essentially means that an undervalued currency could be labeled as an illegal subsidy. Anyone else confused?
The article chalks it up to jealously and resentment against China because it has a growing economy and we're losing all of our jobs to outsourcing which seems petty for this great nation (if I'm to believe the propaganda). Obviously this is against the World Trade Organization's policy and if the bill did ever end up becoming a law, China could bring the U.S. to court.
Bloomberg makes it a little clearer in that this bill is essentially a tariff against China. However, wouldn't a tariff also hurt the working class as it causes a rise in the price of goods? In addition, if a company can prove that it is being harmed, the review would take approximately a year. Am I the only one that thinks that is a waste of time and money?
So, I think that Obama should not sign the bill, but as the Senate and maybe the House are showing, there is growing support for anti-China sentiments. Xiahua says that it might end up leading to a trade war. That sounds like it will just hurt the people this is trying to help. Could this hurt Obama's campaign? I'm not really sure, but what do you think? One thing that seems fairly certain would be that this would definitely hurt the U.S.'s reputation and make many enemies.
There are many questions still reeling around and it is not even certain that the House will pass the bill although many of then to be leaning towards passing the bill. This protectionist attitude seems fairly new, but the Senate has been trying to pass similar bills since 2003. Puts a new spin on "the land of the free."
2 comments:
When you say that this bill will hurt the working class I think you are failing to take into account how much more the competition we are in with China's undervalued currency has hurt American worker's. For year's American manufacturing workers have seen their jobs outsourced because the cheap cost of labor and doing business in places like China. Even workers in companies that do not move overseas are losing their jobs because their employers are driven out of business because of the artificially low price of the goods of their Chinese competitors.
I have to agree with you, Sophia. While Unknown makes a good point, I think there are better ways to handle the situation. I'm not sure if a tariff would really help our economy. I think it'll just end up angering many countries and making us even more disliked by the international community.
While there aren't too many other ways to attack the major problems related to outsourcing, I don't think that this is the best way. We could somehow tax outsourcing or give benefits/tax breaks (ugh) to people who keep their businesses & manufacturing in the US. By creating a tariff on imports (if I understood this correctly) we are just making a bigger mess out of the situation. We need to handle the problems from our side.
I, too, really hope that Obama doesn't sign this because it seems like a waste of time, energy & money.
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