What lies behind anti-China rhetoric in Congress?

By John Ross
0 CommentsPrint E-mail China.org.cn, September 27, 2010
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Arguments put forward in the US Congress to justify calls for tariffs on Chinese imports have so little economic logic they are clearly not the real reason for the proposals.

Speaker of the House of Representatives Nancy Pelosi claims proposed tariffs against China are a "key part of our Make It in America agenda." She argues that forcing China to revalue the RMB "could create a million US manufacturing jobs" and would "cut our trade deficit with China by $100 billion a year, with no cost to the US treasury."

Magic growth formula    [By Jiao Haiyang/China.org.cn]

To see the senselessness of this argument it is sufficient to note that the U.S. does not produce, nor could it profitably produce, most of the goods that it imports from China. If tariffs were imposed on China, similar low-priced products would be imported from Mexico, India or Vietnam. No jobs would be created in the U.S., for the simple reason that US workers cannot be hired for the wages paid in China, India, Mexico or Vietnam.

On the contrary, a trade war would lead to a net loss of US jobs. Any country facing trade sanctions inevitably retaliates – not to do so would invite further sanctions. And China would not take action against non-existent US cheap toy manufacturers, but against sectors where the U.S. is competitive – farm products and high-tech.

The U.S., therefore, would not gain any jobs by blocking Chinese imports – the jobs would go to Mexico, India or Vietnam – and would lose jobs in farming, high tech and other competitive industries. The net result would be less US jobs.

So if the economic case makes no sense, what are the real reasons for the Congressional moves?

One obvious answer is the Congressional elections. Politicians love to distract attention from social problems by blaming some group or other. In France we have seen President Sarkozy, plummeting in the polls, ordering the expulsion of Roma – and being condemned by the European parliament. Not only are such expulsions illegal in the European Union, but they are totally irrelevant to the economic issues confronting France. In the U.S., some politicians have decided that the role of scapegoat should be assigned to China. It is a common and disreputable type of politics.

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