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The coming threat of tariffs against China will start a trade war neither of us will win, but what if there were a way to pressure China and serve our own needs on the global stage at the same time?

Congress is starting to make noises about Chinese currency manipulation, typically five years too late and without much going in the way of a plan. The problem is, nobody wants to start a trade war and possibly jeopardize the flow of cheaply made and unreliable goods into this country, nor anger the government that gives us lots of money to run up those huge deficits Republicans like to make and then deny. Ok, I’m not making friends, so let’s move on.

The issue from our side is Chinese wages are so low, tremendous amounts of our manufacturing has shifted to our communist overseas leaving us with a dearth of jobs and a lust for the cheap stuff. This works out great for China, since they have a pretty massive need for jobs for its population. Thing is, China keeps and official exchange rate, which is the same every day, rain or shine, no matter what the market does, hence the charges of currency manipulation.

Now the problem. The usual means of protesting this is to make sounds about putting in tariffs on the goods to correct the currency imbalance, and if they call us on the bluff, then we actually do it. But this will only escalate the problem, and they will push their interests and well, international tensions are not a good thing right now, given certain global economic meltdowns happening at the moment.

Of course, there are other global problems that could distract us all from these issues, and make the whole thing a muddled mess, like Iraq and Afghanistan. Hey wait a minute...

It seems to me we can work towards a solution to both problems at the same time. You see, a lot of the problems of Afghanistan and Iraq come down to having jobs. In Afghanistan, men will fight for the Taliban for a few days or longer just to feed their families. Farmers grow poppies instead of food because they make more money. In Iraq, there are similar issues, some of the soldiers of the militias we fought after the war were working for money, not ideals. What they want are jobs, American money, better lives.

This is where the issues overlap. Now, I know there are some problems with this plan. Afghanistan is not the technological capital of the world, and many of the people we’re talking about are the least skilled of people in the world. We can start with less complicated products, or find places with sufficient technological resources, like India or Brazil, nations which are our allies. We could send some of our manufacturing to Haiti and Chile, reduce the need for the massive aid being projected for future rebuilding, and at the same time cut down on the carbon emissions of shipping all of this across an ocean.

And there are other issues, the ports of these nations may not be as advanced, but demand is the mother of infrastructure, and infrastructure puts people to work, furthering our goals in these nations even more.

So here’s the idea, instead of getting involved in a trade war in Asia (almost as bad as a land war), we could provide tax breaks or subsidies to companies who will move new manufacturing or existing Chinese manufacturing away from Communist China (this will get the Republicans behind it for sure), and get our consumer greed working for us.

Imagine the fear in China when their growth is threatened, and even better, they may begin to lose jobs.

Originally posted to Johnny Noone on Sun Mar 21, 2010 at 07:17 PM PDT.

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Comment Preferences

  •  Tip Jar (2+ / 0-)
    Recommended by:
    Gooserock, buckstop

    http://ihopeyourehappy.com

    by Johnny Noone on Sun Mar 21, 2010 at 07:17:51 PM PDT

  •  I Make Things and Export Thru Duties into Other (1+ / 0-)
    Recommended by:
    Lujane

    countries. If I can do it, China can do it.

    So I say no effing way.

    And they can take a 1 or 5 % hit on selected exports that we can presently make here, as we move slowly toward rebuilding some productive capacity here.

    They don't have to worry. They and India and other parts of the developing are not going to lose their dominance of so much of our economy over restoring some weak controls over our trade.

    The "rational moderate" answer to every problem really isn't always tax cuts. The share of taxes business pays has plummetted since the days only gray haired people still remember, when America was not declining.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sun Mar 21, 2010 at 07:25:06 PM PDT

  •  tariffs were just fine from 1790 to 1980 (2+ / 0-)
    Recommended by:
    Lujane, pstoller78

    then we let China go crazy, and we became a basket case. No problem there.

    •  20% mortgages & gas lines (1+ / 0-)
      Recommended by:
      Lujane

      Most Americans associate 1980 with 20% mortgages and gas lines.

      Tariffs are taxes.  The president or congress that increases either is taking a big risk.

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