Wednesday, February 3, 2010

Sliding Towards a Trade War ?

The Financial Times states the obvious:

With US unemployment in double-digits and a huge trade deficit with China, complaints about Chinese currency manipulation are getting a ready hearing in Washington. If China appears to be actively initiating a trade war, the American reaction may well be: “Bring it on.”

The US public never liked the end results of 'free trade' anyway, especially in key electoral states such as Michigan, Ohio and Pennsylvania. It wouldn't take much of a push to whip up a protectionist fervor.

I do wonder about China's recent hysterics. I suspect they are for domestic consumption, but that indicates a somewhat weak internal political situation.

1'China overplays its hand on Taiwan' - Financial Times

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