Useless Sanctions on China: Robert Reich Says 'Forget It,' Better to Rebuild American Industry

[Better Believe It]

Useless Sanctions on China: Robert Reich Says 'Forget It,' Better to Rebuild American Industry
by Robert Dreyfuss
September 19, 2010

More and more, as the economic crisis continues and unemployment stays high, many politicians, labor officials and economists want to blame China and worse, take it out on China by punishing Beijing with sanctions, tariffs and other measures, even at the risk of trade war. That’s why Robert Reich’s piece in the Christian Science Monitor comes as a breath of fresh air.

Reich says that “it’s naive to assume all we have to do to get the Chinese to do what we want is to threaten them with tariffs.” He points out that China might well retaliate, undermining the US economy, too, and that China isn’t likely to change what they believe is a key political and economic strategy just because the United States makes it more expensive for them to keep it. And, he says, “even if China did allow its currency to rise against the dollar, there’s no reason to think this would automatically generate lots more American jobs.”

He concludes:

“What worries me most about all this tough talk about China is it diverts attention from the real problem. American isn’t suffering high unemployment because we’re buying too much from China and not selling them enough. Trade with China is a small portion of the US economy. … The central challenge we face isn’t to rebalance trade with China. It’s to rebalance the American economy so its benefits are more widely shared.”

What the United States needs to do, of course, is to create a domestic industrial policy to revive manufacturing, tax the rich, strengthen education and job training, and other measures to revive American decline. One country that has done a lot of that already is Germany, as a Washington Post article this week provided a stunning glimpse into why the Germans don’t exhibit the kind of anti-China hysteria that so many Americans do. Unlike the United States, which has a huge and growing deficit with China, Germany’s trade is almost in balance, and Germany has managed to export huge amounts of high-tech goods, including BMWs, to China.

Read the full article at:

http://www.thenation.com/blog/154886/useless-sanctions-china-robert-reich-says-forget-it-better-rebuild-american-industry

[ProSense]

1. Here is Krugman

on the subject (also Simon Johnson)

[RandomThoughts]

2. Here are the questions.

Does china have a democratically elected government and safeguards for rights of citizens.

That was why we claimed we were against Soviet bloc.

So it must have been for some other reason.



So should we set limits on trade with countries with ideals that do not match ours, or should we change our ideals on governance to match them?

[Better Believe It]

5. The closest relationships the U.S. has with other nations are frequently with dictatorships!

Including today.

Saudi Arabia.

Columbia.

Afghanistan

and the list goes on.

[whathehell]

7. Very interesting. n/t

[Tierra_y_Libertad]

3. Erecting a bogeyman to blame is easier than actually doing something for the economy.

Essentially, we are telling the Chinese to wreck their economy to "save" ours. Of course, embargoes, tariffs, etc, would only produce a trade war which we would lose.

[HughMoran]

4. Yeah, let's just ignore the currency manipulation

After all, people don't buy products based on price, right?

:eyes:

[RaleighNCDUer]

6. Hell, just give corporations tax breaks for building factories in the US and

DON'T give them tax breaks for building them overseas.

That would be a GOOD start.

[pampango]

8. Better to go after foreigners than to provide progressive policies for our own people.

It's all China's fault. If we can just stick it to the Chinese (or Mexicans or the Japanese, anybody) everything would be fine.

Don't tell me that Europe trades more with China than the US does (or that Germany has a trade surplus with China) and yet their people have better lives because they have an effective social safety net, progressive taxation, and strong unions. It's all China's fault!

In 2009 our imports from those places was as follows:

China - $296 billion
EU - $282 billion
Canada - $226 billion
Mexico - $177 billion
Australia - $8 billion
New Zealand-$2 billion

http://www.census.gov/foreign-trade/balance/c6021.html

Our trade deficit with the EU ($61 billion) is greater than with (Mexico $48 billion).

[girl gone mad]

9. Reich is right.

Entering a trade war with China would be foolish on many levels.