Thomas Donohue, the president and CEO of the influential business group, told a group of Dow Jones reporters and editors that U.S. policy makers should resist embracing protectionism. While understandable in times of economic stress, an attempt to force China’s hand could have negative repercussions for U.S. firms, he said, as Beijing seeks to maintain full employment for its citizens.Keeping them as a very positive force? How about first making them a positive force? Because as far as I have seen they have not been.
“They want to keep all those people working and if that was forced on them somehow … they would simply just drop the prices as low as they have to to keep those folks working,” Mr. Donohue said.
A bipartisan group of U.S. senators last week passed legislation intended to force Chinese officials to allow for greater appreciation of the yuan through trade channels and other international governing bodies. House GOP leaders have thus far balked at moving the bill, even though it enjoys support from both House Democrats and Republicans.
Mr. Donohue said it is important for U.S. officials to press China to speed the pace of appreciation — it’s a “great idea to ring their bell and them know we’re still worried about this” — but protectionist policies could backfire.
“Keeping them as a very positive force in the things we’re trying to do in the world is important, and sticking a stick in their eye is not a smart idea,” he said.
Sigh! The normally-excellent Tina Korbe at Hot Air backs up the Chamber's statement:
In other words, as has been oft-repeated, this will start a trade war.So, what's your point?
Don’t buy the lie that the China currency bill is a jobs bill, either. As U.S.-China Business Council president John Frisbie has explained, “The main reason for the decline in manufacturing jobs [in the U.S.] is productivity, not China. The U.S. makes more with fewer people, primarily because of productivity and technology advances. … Yes, China needs an exchange rate that better responds to global trade flows. But China’s exchange rate is probably not as significant a factor in the U.S. trade deficit that some make it out to be.”Not that many. Not nearly as many as what we've lost to China.
Also consider that Chinese imports support their fair share of jobs for non-Chinese workers (a.k.a. workers in the United States, as well as in other countries).
Because China’s blatantly unfair practice of undervaluing its currency is understandably unpopular, the bill to slap sanctions on China enjoys bipartisan support in both the House and the Senate. Still, the House should resist passing it. If Sen. Chuck Schumer and others in support of the bill seriously want to credibly demand that China stop its devaluation, the best bet would be to address the U.S. deficit and debt and to reverse Barack Obama’s failed economic policies so the Federal Reserve won’t have any excuse to continue to intentionally devalue the U.S. dollar through quantitative easing. In other words, Schumer and company should remove the plank in the U.S.’ own eye before worrying about the speck in China’s.I don't agrere with the effective devaluation of US currency, either, but that is no reason to demur on China's blatantly predeatory currency practices.
And I'm not sure exactly how this bill would hurt the US in any significant way. Yes, the prices for US consumer goods might go up. I understand that. But in order to buy those goods US consumers must have jobs. When so many of those jobs have been shipped overseas, especially to China, it seems pretty self-defeating.
The argument has been made by groups like the US Chamber that our jobs are going overseas because other countries have lower costs: lower wages, fewer worker protections, usually no unions, fewer environmental protections. The Chamber has argued that we should thus weaken our own worker and environmental protections.
Why? Why should wages, labor laws and environmental safeguards in the US be dependent on what they do in China? Or Pakistan? Or Bangladesh? Or other Third World countries (and make no mistake, most of China is still Third World and is often dependent on slave labor). Why should we have to endure pollution so bad that paint peels off cars? Or near-slavery wages? Or dangerous working conditions? So US businesses can make more money? That's ridiculous. And it has been consciously rejected by the US electorate.
That is why I tend to support tariffs on goods from countries that do not have the protections offered in the US. You should not be able to take advantage of our market if you abandon it or deliberately undercut it. If busineses don't like the tariffs they can move their factories back to the US from China.
China is the worst offender. The US government should nail it and hold it accountable. Businesses, pick your sides. Are you American or not?