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He estimates that a 20 percent rise in the yuan would reduce the U.S. current account deficit by $50 billion to $100 billion. A more extreme move, say 40 percent, would translate into as much as a $200 billion reduction.
The United States gains about 6,000 jobs for every $1 billion improvement in the trade balance, so $100 billion would work out to 600,000 jobs, he said. That is more than the anemic U.S. economy has generated in the past six months combined, and would be enough to shave about four-tenths of a point off the 9.1 percent jobless rate.
Bergsten's view is not universally shared.
Some economists argue that a stronger yuan would simply shift manufacturing to other low-cost producers such as Bangladesh or Vietnam, and the United States would still be uncompetitive.
I think this currency law we are trying to pass is ridiculous.
China manipulates the yuan, sure. the US also manipulates the dollar, the EU manipulates the Euro, the Danes manipulate the kroner....
Raising tarrifs won't create jobs, although it might slow down the rate of offshoring, while raising the price we have to pay for imported Chinese goods.
The nuclear option doesn't really work unless you control both houses and the presidency. Its just feeding the maddening crowd, Remember Reid is the one always saying voting on something that has no chance is foolish and a waste of time.
The nuclear option doesn't really work unless you control both houses and the presidency. Its just feeding the maddening crowd, Remember Reid is the one always saying voting on something that has no chance is foolish and a waste of time.
The Nuclear option is not really the purpose of this thread.
This is old news... everyone knows about it... there are already large corporations that have taken the precaution of moving to other SE Asian countries such as Vietnam should the Yuan get higher... so the whole point is moot... as in, it does not translate to more jobs and just shift jobs from China to other Asian countries... in fact, it has already started...
You can't force another country to change their currency policies.That is a direct intervention in a sovereign country affairs. The "geniuses" who signed the trade agreements with China in the past should have though of that.
In America there is a strong felling against "protectionism", but protectionism seems to work wonders for some countries...
And competition between US companies and Chinese is "unfair" on many other accounts. They don't have strict environmental regulations, employment regulations, etc. but our "free trade" advocates do not get that and think you can twist China's arm to comply with our vision. Yes, they are in for a surprise.
China manipulates the yuan, sure. the US also manipulates the dollar, the EU manipulates the Euro, the Danes manipulate the kroner....
There's a vast difference between trying to make your currency more strong or more weak and pegging your currency to the value of another currency. The Chinese are doing the latter in violation of international law. It's one of the reasons for the massive trade deficit that the United States has. Typically, when currencies float, this imbalance would adjust.
The Chinese are illegally keeping their dollar artificially low in order to gouge wealth from America. There are plenty of companies who benefit from this, but on the aggregate, it is a very bad thing and should have been dealt with a decade ago.
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