Monday, March 22, 2010

Skirmishing With PRC Over Trade

Seems that this is getting a bit more contentious.


And in the other corner:

China's commerce minister warned the United States on Sunday that if it launches a "trade war" against China by levying punitive tariffs on Chinese imports, the United States will suffer the most. --WaPo

PRC has a helluvalotta US dollars in its piggybank which it has to spend somewhere. OTOH, somebody's gotta buy US Treasuries or ObamaGummint goes "poof!!"

HT: CalcRisk

1 comment:

J. Strupp said...

We have the upperhand. No question about it. Allowing the Yuan to appreciate against the dollar would substantially hit Chinese exports while boosting U.S. exports and providing a much needed stimulus to American producers. The Chinese asset portfolio would take a minor hit as they unloaded treasuries which would be mostly gobbled up domestically and abroad (mostly by Japan I would assume).

China has been exporting capital AND unemployment for years. It's time they stop doing both for the good of everyone.