October 5th, 2011
05:04 AM GMT
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Hong Kong (CNN) – China says it could be on the march to a trade war with the United States. That’s after the U.S. Senate on Monday passed a key test vote that targets countries believed to keep their currencies artificially weak.

If the bill passes in the Senate – perhaps as early as this week – it would be the next step at shooting new tariffs onto exports from those countries. Looking between those Congressional crosshairs, this week’s legislation is clearly aimed at China.

The consistent clash takes place over the yuan, China’s currency, which China keeps loosely tied to the U.S. dollar and makes the country’s exports to the U.S. cheaper than those “Made in the USA.”

The U.S. has had a trade deficit with China lasting more than a quarter century. In 1985, the deficit was $6 billion, according to U.S. Census Bureau data. It's now skyrocketed to more than $273 billion, according to the latest 2010 figures.

For its part, China has allowed the yuan to appreciate 6.7% since August 2010 but some critics say its real value could actually be 20% to 30% stronger. Today $1 gets you RMB 6.77.  If those analysts are right, $1 could equal as little as RMB 4.75, shaving off a huge pricing advantage for Chinese goods sold in the U.S.

Will the name-calling from the U.S. Congress work? Will China bend over, say “I’m sorry,” and hike its currency?

That’s not going to happen. Saber rattling has rarely worked and as the Chinese economy rises, that kind of talk will work even less.

Let’s really simplify that bilateral conversation style that’s led to diplomatic, economic and military freezes over the past decade:

Washington: “China’s currency policy’s not fair! I’m gonna get a stick and wave it in their face so the world can see we have a stick we can use!”

Beijing: “The U.S. says it’s going to hurt me. But if it does then I’m gonna kick it right back. It’s not the boss of me, I can do whatever I want!”

Can anyone see any kind of solution come from this kind of posturing?

Call it name calling. Call it hot air. Call it political vote-getting. I call it tired.

To get things done, a change of communication style needs to happen.

Instead of each country beating its chests like mad gorillas vying for dominance – and my apologies to gorillas – let’s try our indoor, polite voices. After living in China for six years, I’ve learned this works better.

A quick story to illustrate:

It was the winter of 2001 and I was visiting Shanghai. It was frigid and I needed warm boots.  My friend suggested we visit the market area of Xujiahui in the French Concession.

Walking through the stalls, I found a pair of boots and tried them on. Too big – and the vendor said this was his only pair in that style. Yet strangely, seconds later, he returned with another pair claiming they were 9½’s – my size. He put those on me and even tied them up nice and tight. Very tight.

I walked around, thought they were still a bit loose but figured I could manage and bought them.

A few minutes later and you can guess things started to fall apart, literally.

The laces came undone and the boots started flopping about. I checked the tag: size 11’s. The vendor had lied to me. They were the same pair I had tried on – the vendor’s only pair.

I marched back to the shopping market and prepped a tirade in Chinese that would make him lose face in front of everyone.

But as I got closer I thought, ‘If I did that, then I wouldn’t get my money or a pair of usable shoes.’

Fighting the urge for an oral smackdown, I found the vendor and focused to whisper these words in his ear, “喂哥们儿,我知道你做了什么”. (Translated, that means, “Hey buddy, I know what you did.”)

Looking down at the ground he nodded his head, led me into his shop and gave me back my money – without a word.

No saber rattling for fisticuffs. No brinksmanship to involve the police. No loss of face. Just a calm voice. You get the moral of the story.

And yet what kind of posture are U.S. politicians taking towards China this week? Clearly not the quiet, face-saving kind.

After Monday’s vote, these are what a few U.S. elected representatives pushed out.

Charles Schumer, New York Senator: “Jobs and wealth are leaving America and going to China because China cheats.”

Lindsey Graham, South Carolina Senator: “There's a series of measures engaged in by the Chinese government... That costs American jobs and I’m tired of it and it's killing American manufacturers.”

Sherron Brown, Ohio Senator: “I think there's a reasonably good chance China will respond in part by adjusting their currency.”

On the contrary, any China watcher will tell you these kinds of statements will neither encourage China to appreciate its currency, nor will it set a positive mood for negotiations.

Sure the United States has justified cause to be angry about its billion-dollar deficit. Sure unemployment is suspended at 9.1% amidst claims it’s losing millions of jobs to China. And yes the country is revving up its 2012 presidential election year and China is an easy piñata to hit for domestic points.

But we are able to achieve a higher level of discourse – in both the United States and China.

U.S. President Barack Obama said that diplomacy is the best way forward. He does not want an anti-China bill to land on his desk or for a trade war to start on his watch.  Nor would a Republican president, regardless of what he says on the campaign trail.

China is the United States’ third largest trading partner in the world. Each country needs the other. It’s a long time coming to talk to each other more diplomatically, quietly and perhaps out of the public eye.

When we do, the issues might get resolved just a bit easier.



soundoff (73 Responses)
  1. Pianki

    Every time the Federal Reserve orders the US Treasury to print 500 billion more $Dollars those previous circulated $Dollars are devalued. So what is China doing thats so terrible. Where in the US can T shirts and jeans be produced cheaper than whats in China?

    October 5, 2011 at 5:49 am |
  2. Jeff

    The money can come back to the USA if Americans are not so paranoid about letting Chinese companies invest in American companies, as well as the export of technology products to China. Because of US paranoia, China end up buying technology products from elsewhere like Russia, Germany, Israel, UK, etc, as well as invest in equities elsewhere.

    October 5, 2011 at 5:59 am |
  3. Jeff

    An example of US paranoia causing USA to lose sales is that US paranoia of China's space program: China bought a multibillion dollar satellite imaging ( for imaging of land in China) from the UK. Could the sales have gone to the USA? This is one of many sales that USA lost because of USA imposing restrictions on itself. Another case: USA refuse to sell advance fighter jets to China, so China bought the advance Sukhois from Russia. Another lost sale! The ISS space station: USA refuse to let China participate, so China pursued its own space station program. With the European partners in financial crisis, the ISS program is in jeopardy, indirectly impacting NASA as well. More jobs lost in NASA? China's participation in ISS could have preserved some jobs in NASA by keeping the ISS alive longer.

    October 5, 2011 at 6:05 am |
  4. C K Hui

    The U.S. Congress is all nuts, idiots or lunatics. As Pianki pointed out, the US printing money is effectively to devalue the Dollar which keeps rising due to safe-haven mentality of crisis in the Euro-zone. The employment or unemployment problem in the US is due mainly to high labor wages and lack of innovations. Many US corporations – GE, Apple, YUM, Starbuck – are increasingly expanding overseas – China, in particular – reaping profits which, in theory, should have returned to and generating wealth in the US. The economics of trade balance is no longer valid in this era of globalization as it is the balance of wealth that is becoming the real issue. The debate in Congress is not going to result in anything but just lots of hot air which will quickly fizzle out. US and China have to work together as the two are separately linked – economics and geopolitics-wise.

    October 5, 2011 at 6:11 am |
  5. ItsUSAPoliticianFault

    Dear All, I am an American Citizen and have friends in the manufacturing businesses in the USA. It is our governement fault to chase away all the manufacturing businesses... From extreme regulation to worker compensation to all type of insurances required to run the business and on top of that can be sued by anyone from dumb workers to dumb customers. When I mean dumb, workers not carefully watch where they walking and fall and slip and sue the business owner... Dumb customer, spilling hot coffee on themself and suing the buiness who serve the cofee for million of dollars... Now, you ask why businesses are moving to another country...

    The politician should looks at their policy to manufacturing sectors... Loosen up, no minimum wages...just let the supply and demand what we should pay for the workers... We offer medical insurance... So no suing if they get hurt on the job... Customer suing the company for million has to stop, but company manufacturer has to recall if products are not up to customer standard from a third independent testing company – -not from the lawyers. Any business or customers involved with lawyers will be disqualified from suing or compensation.

    There...you will get 100000 of manufacturer back in the USA from clothing to shoes to furniture to whatever... Oh hi-tech... Apples design in the USA, Made in the USA...etc...

    October 5, 2011 at 6:15 am |
  6. ItsUSAPoliticianFault

    Why politicians never ask all the manufacturing from hi tech to low tech what would it takes for them to move back to the USA instead of outsourcing to emerging market such as China and Viet Nam? Cheap labors are one thing but not the main reasons why we all outsource... It's the regulation of running a manufacturing facilities and all type of insurances required and law suits. When the USA changes these regulation and insurance policy and law suits... We can move back to the USA...

    October 5, 2011 at 6:22 am |
  7. mcamelyne

    Negotiating with China on trade is the same as negotiating with the tea party over taxes. They dictate and we must follow. Call it childish or whatever you like, we need to respond. I propose an immediate tariff of 40% across the board on Chinese goods. Like you said, they need us, but the truth is we can buy those things somewhere else or make them ourselves. Call it jingoism, but I think we should put the American worker first and the Chinese worker last. If you agree with my position, look for me at Americans Elect, support Mike Ballantine, 2012, the people's President, help me bring an end to corporate control of our government.

    October 5, 2011 at 6:54 am |
  8. AndyinOz

    It is a bit rich for the US politicians to whinge about the Chinese "cheating" as quoted in the story when the US still gives billions to its agricultural sector so it can still compete, though admittedly places like the EU do so also. No side plays the game in its fairest form.

    October 5, 2011 at 7:04 am |
  9. reino hsieh

    as you knew, i have been poor for a long time and need appreciation of utd for cost-down exchange overhead. ntd should be your first target to be implemented. really. ntd is a thug currency.

    rmb would be your good friend because i would be there. dont worry.

    October 5, 2011 at 8:11 am |
  10. Beerbarrel

    It has already been brainwashed into all the Americans: If there is anything wrong with the USA, then it must be China's fault.

    October 5, 2011 at 9:29 am |
  11. norman trabulsy

    Until people become more important than "trade policies" than we will continue down this dead end "business thinking". Why does trade exist? So that profits pour in, regardless of workers quality of life? The system is rotten and deserves to be destroyed. Look at what it has done to people and the earth. It is irredeemable, yet still championed by people everywhere. A true illustration of humanities increasing lack of imagination.

    October 5, 2011 at 9:52 am |
  12. Foxy Aus

    Undervalued RMB is killing the manufacturing industry here in Aus as well. Someone needs to step up and stop artificial exchange rates.

    October 5, 2011 at 10:39 am |
  13. australopithecus

    Just the good old Americans getting adepts at shooting themselves in the foot.

    October 5, 2011 at 10:54 am |
  14. Jay

    Nice story. But China is like a tantrum child. It wants what it wants. How long has the U.S told China to crack down piracy and counterfiet? Did they do it? And if businesses want to open shop in China, they have give them technology. China is too dumb to play it straight. Its about time Congress acts on this manipulating child.

    October 5, 2011 at 10:57 am |
  15. Xenos

    Had the American government been concentrating on their economy instead of wasting all their energy on those stupid two failed wars in the Iraq and Afghanistan for the last decade, maybe they wouldn't be in this screwed up mess. Suck it up USA, and stopping pointing fingers at China whenever you have a problem.

    October 5, 2011 at 11:16 am |
  16. Xenos

    Americans two-faced hypocrites. Blaming China for manipulating currency, when they've been doing the same over the past 12 months and relentlessly printing money to bolster their cash flow. Using one finger to point at China, while using their other hand to ask for China's help to bail them out. Blasting Russia and China at the UN for Vetoing they Syria resolution, while they Vetoed Palestine's right to claim nationhood. Accusing other nations of human rights violation, while maintaining Guantanamo Bay where those held have no basic right to a fair trial. Telling the EU how to handle the current crisis, while they don't even know how to handle their own. The world is really getting sick of these AMERI-CONS

    October 5, 2011 at 11:35 am |
  17. g.r.r.

    China should not just hike the value. Instead, they should honor their promises on treaties and IMF and allow the RMB to float freely. Likewise, they were supposed to drop 90 trade barriers and let them remain gone. Now, they are one of the top nations with most trade barriers: over 400.

    This will hurt us once it goes on. BUT, if we re-vamp our taxes, drop some of the taxbreaks, we can not just bring back manufacturing, but stop the outpouring of money out of the nation.
    Solve the illegal alien issue with HR2164 (needs somechanges, but coming along) and then we will have the economy righted.

    October 5, 2011 at 11:43 am |
  18. Jay

    No surprise at all China and Russia vetoed over Syria. Thug sticks with thug. Yes, i like to see Tibetan claim nationhood. But wait, Tibetan was a nation before China swallowed it whole and claimed its own. When it comes to human rights, China is a saint. Every nation should look to China as a model.

    October 5, 2011 at 11:44 am |
  19. g.r.r.

    Xenos, we printed the cash because we had near depression caused because of China's fixing the RMB to the dollar. If China would honor their word and allow the RMB to float, that would have solved China's inflation and America's deflation. As for the rest, whatever.

    October 5, 2011 at 11:45 am |
  20. Matt

    First of all, there already is a trade war, but only one side is playing – China. Now that the other side wants to play, China is getting mad. Why shouldn't China be able to keep up its mercantilist policies while everyone else does nothing? Trade needs to be fair and balanced. That is not happening now.

    Secondly, one should not put their faith in modern economics. Where have the economists been as the world has plunged into the worst economic crisis since the Great Depression? Some people are suggesting that we may be on the verge of a second Great Depression. Don't listen to economists.

    Thirdly, trade with China is suppose to make us better off, but has it? Our industries are being gutted as more and more jobs move to China. The money we saved on goods from China was all used to buy things that couldn't be made in China – like housing. How's that working out for everyone?

    Fourthly, modern economics does not account for the fact the the rise of China has substantially increased the probability of war, both with its neighbors and the US. The Chinese are building more and more nuclear missiles and pointing them at us. Some Chinese analysts are suggesting that China turn the South China Sea into a war zone. A couple of Chinese generals has threatened nuclear war against America concerning Taiwan.

    Historically, when an empire runs into a conflict with a rising power, then the probability of war is 6 out of 7. Currently, Taiwan, the South China Sea, East China Sea, the Indian border with China and Pakistan-China look like potential flash points for war. In other words, the rise of China is going to be anything but peaceful.

    October 5, 2011 at 12:01 pm |
  21. Anderson Clayton

    "U.S. President Barack Obama said that diplomacy is the best way forward"
    Obama has CLEARLY abandoned this strategy, he now favors Bush CAVE MAN style!

    October 5, 2011 at 12:05 pm |
  22. Rex O Slate

    The largest problem, in my opinion, is that the exchange rate of the yuan to other currencies is not set by the free world market exchange, as in the case of most of the major currencies, but by the Chinese government itself. This practice is not new by any means, but has been the policy of most communist governments of the past. The problem here is that China has left their communist past, as far as a centralized totally controlled non-capitalist economy, but at the same time has retained their iron-fisted control of their currency in true communistic totalitarianism. This is their right, if they choose to do so, but this does not present an "even" playing field to not only the USA, but also to the European/Asian world, etc., who practice both free-enterprise and free-exchange rate policies. The complaints of this disparity are NOT only from the USA, but ALSO strongly from Europe. The only solution would seem to be to impose fair tariffs from the rest of the world to level the playing field, as the only realistic solution, until China sees fit to either join the rest of the free-market economies' free floating exchange rates or decide to more isolate themselves globally (which would be undesirable to all parties involved). However, one must understand that tariffs would never produce the desired effect of some, who think that this would "send" the jobs back to the USA and Europe in mass. Even with a more level playing field, the costs of labor would still be FAR lower in China than in the west, as they are also in the other developing giant – India. We must give China BOTH the necessary time to continue to transition from their centralist non-capitalistic economic past to a 'normal' free market economy, but in the mean time not be bulldozed under by them ...

    October 5, 2011 at 12:34 pm |
  23. China Lee

    In 2005, the exchange rate was 8.27 Chinese Yuans for one U.S. Dollar. (Source: http://en.wikipedia.org/wiki/Renminbi )

    In 2011, the exchange rate is 6.36 Chinese Yuans for one U.S. Dollar. (Source: http://www.x-rates.com/d/USD/table.html )

    The Chinese currency has appreciated 30% against the U.S. Dollar in the last 6 years. What are the U.S. Senators complaining about?

    ----

    Math:

    In 2005, one Yuan was worth 12.09 cents. [1 dollar / 8.27 yuans = 12.09 cents per Yuan]
    In 2011, one Yuan is worth 15.72 cents. [1 dollar / 6.36 yuans = 15.72 cents per Yuan]

    Yuan appreciation = (15.72 cents – 12.09 cents) / 12.09 cents * 100 = 30.02% appreciation vs. U.S. dollar

    October 5, 2011 at 12:43 pm |
  24. helloworld

    看到一群被门板夹过的人,哈哈!I agree with Jeff.

    October 5, 2011 at 12:48 pm |
  25. Xenos

    g.r.r. – you guys printed the cash because you've wasted everything you had on Iraq and Afghanistan for the past 10 years. The last decade has been nothing but war, war, war led by the US. Your government has neglected the economy for so long that now you're all paying the price for it. Face up to it. You guys only have yourself to blame. Now redirect that finger of blame back at your government and make a difference!

    October 5, 2011 at 12:59 pm |
  26. Marcelo

    Americans are paying for believing the Chinese when they said they would appreciate RMB, but it is just a game for the Chinese. They are unreliable. And if the American Government doesn't close its door to the Chinese they will be in trouble and the Chinese will just look at them and laugh.

    October 5, 2011 at 1:21 pm |
  27. cicy

    How can Americans pass the buck to China? U.S. government borrowed money from China, and by using tricks to ask for a raise of the value of RMB, U.S has exploited all the benefits.

    October 5, 2011 at 1:22 pm |
  28. Spadeleine

    This is the problem. We in the west should never have allowed trade to happen with countries who show a total disregard for fair trade, property laws, human rights, democratic development, etc. China would have been decades behind to where it is today if it didn`t have the massive Western consumer market to sell their #%#%#. And if it didn`t have the massive Western line of corporations that started to build factories their decades back.

    But it`s certainly never to late. Life goes on, The West must become more protective of it`s own markets if it wan`t to keep having strong economies. It most become smarter, faster and more unforgiving. Especially stop wasting public funds on things like foreign aid like Europe and it`s 50 Billion Dollar foreign Aid total. This money could build a European Manned Space program that could easily put Europeans on the moon and Mars (Nasa budgets is 17billion dollars). Lets show some leadership because countries like China will take their own interest first you can count on that.

    October 5, 2011 at 2:08 pm |
  29. anon

    The author thinks that things can be handled in the background being quiet so the government of china can save face. They tried that years ago. I do believe there are ways to do this without saber rattling however some times you need to be less discreet in order to accomplish something. In this case I don't think it is wrong to tax the imports of another country more heavily. Whats more is in the grand scheme of things it wont hurt china or cause the price of goods to go up all that much. What I find funny is mention the word "taxes" and suddenly everyone goes ballistic whining and crying and paying their lobbyists to reverse or block a bill without looking at the larger picture. Devaluation or not they should be taxed more. The fact that we haven't taxed enough is what drove businesses to relocate manufacturing overseas. In fact that same pair of jeans you claim is so cheap could actually still be made here and sold at a proffit for the same price. The only difference is instead of making 900% profit they would only be making about 200-300% profit.
    It doesn't take a rocket scientist to figure out the margin number either. Even when you factor in inflation they cost more now then they did when they were still made in USA.

    October 5, 2011 at 3:25 pm |
  30. Marcellus

    This story can be summarized in one word: 'face'. That's why public demands do no work with the Chinese, as they feel they will lose face if they agree. It's 100% cultural.

    October 5, 2011 at 3:30 pm |
  31. Damman

    Everyone should look at themselves to solve problems instead of pinning it all on one or two things. For example, people all claims that by making china's currency float their economy will be come better, do you really have any idea how it will effect the rest of the world? If RMB rises, it will also decrease the amount of profit the develop world will get from the "slave" labor of China. Just think 1 billion people buy Mcdonald burger and there is profit of $1USD, if RMB appreciate 30%, then it also means that it will require 30% RMB to get that $1USD profit.
    Greed/higher profits for companies is what drives people to do stupid things, outsourcing/cost cutting/moving to places that offer cheaper production costs. Look at changes that you can implement to make your local manufacturing more benerficial. When companies can get people who wants to work for peanuts in their own countries then you will not have to outsource to slave labor countries. Problem with people is that everyone thinks their all deserve more than they get, even people whom are on say $100K always thinks they deserve more. Bottomline is that the more people/union demand for more money then the more problems it will create for the rest of the economy.
    For all actions there is an equal re-action, basic law of physics. An thing is that people should not be trying to make money from nothing. For example, short selling should be removed from the whole share trading system, you should not be allowed to sell stock of anything that you do not physically hold. How it is possible for people to sell imaginery stocks that they do not own. If you do not own the stocks then you should not be allow to sell it, period.
    If there is no poor people in the world, then there will not be any rich people. Because there are rich people in the world, then there will be the opposite of that equation...poor people.
    Before you start blaming other people, think about what have you done to make yourself/your own area of influence better or more equal for people less fortunate than you.

    October 5, 2011 at 3:34 pm |
  32. chinese

    stupid american have to understand that china will fight back. it will hurt you also. whether this policy will increase or reduce your employment number, let's see after the war.
    please remember, chinese afraid of nothing. if you forget, please refer to korea war.

    October 5, 2011 at 3:49 pm |
  33. Damman

    Ok "chinese" you beating your chest and saying China is afraid of nothing is not helping the situation. The only reason China is not "afraid" at the moment is that the developed world need's China's consumption level to substant the rest of the world, you can almost say that, the rest of the world need China more than China needs them. However, that does not mean that nothing will hurt China, if you insist on China is afraid of nothing, then you are as delusional as the rest of the world. Remember pride is a sin.

    October 5, 2011 at 4:25 pm |
  34. Andrew

    unless the US wants to put tariffs on everything imported from every country, there will always be a country that will produce things cheaper than the US. So unless we want the US to be competitive with those countries by becoming a third world country too, we need to accept that we need a new dynamic. The US isn't a country that produces goods anymore. We need to focus on producing innovation in business and inventions. In science and high tech. And if we want that then we need to focus on becoming number one in education too. The power of the US is ideas, but if we don't act fast and seize our advantage, we will lose that too.

    October 5, 2011 at 4:38 pm |
  35. Damman

    Well put Andrew, ALL developed worlds are no longer an industrial nation, because the profit driven companies always looking to "exploit" slave labours, (i.e. Ikea used to make things in eastern europe , now all in china) when there are no "slave" labours then there will not be big leaps in profits. Money does make the world go around, and it is the root of all evil, if everyone is willing to live without or less of it then we will have less problems in the world.

    October 5, 2011 at 5:15 pm |
  36. speez

    We didn't notice the Chinese buying ONE BILLION DOLLARS A DAY FOR THE LAST FIVE YEARS to artificially depress their Yuan? Were we too busy shaking down old women and children looking for terrorists in our airports? If you have doubts about this war, check the book "Unrestricted Warfare", published in 1991 by two Chinese army officers. Let me sum it up... They said we'd be too stupid to know that we are under attack and that we'd play buy the rules.

    October 5, 2011 at 5:15 pm |
  37. Kurt

    Just pass the bill and let the yuan do what it's going to do. What do we as Americans really have to lose, cheaply made chinese goods? Oh well I can live without them.

    October 5, 2011 at 5:16 pm |
  38. IamChinese

    American workers are angry because "they took our jobs"; their Chinese counterparts are vexed too since they're working long hours in hazardous work environments only for meager wages and now they are accused of being "cheaters".

    Sure, let's vent our frustrations and blame each other to our hearts' content, but end of the day, we're all just pawns of the rich and the powerful.

    I believe this "international trading" thing is just designed to shift wealth from the poor to the rich, since day 1, whether your country is a democracy or not. (One difference is, if you're jobless in the US, the gov will still make sure you can at least afford to buy milk for your babies, and that the milk is not full of toxic chemicals)

    To those of you having issues about trading with China, I say great, don't do business with us then. Maybe this will finally deliver the final straw that breaks the Chinese camel's back, and bring about some long-awaited changes.

    Honestly, my biggest fear now is that, after a new round of bargaining, our nations will simply go back to business as usual, until the economy inevitably collapses either here or in the US. Call me a pessimist, but that's exactly where I see things are going.

    October 5, 2011 at 5:53 pm |
  39. KBG

    I don't fail to see the USA & the EU got into their current problems by their own short-sighted irresponsible choices. That doesn't changes China is dumping the whole world (not just the USA) with a RMB that is still clearly kept artificially low. There has been enough one-sided benefit for China during the last years at the expense of everyone else. For fairness in global trade & global stability China owes to appreciate the RMB. Else they'll just get more people frustrated at them.
    "Chinese" you can be proud like a Maoist but that doesn't makes you invulnerable, only blind. You are part of this world as well. Right now China has risen in no small part because the rest of the world has found benefit in this arrangement they are now ever more weary of. If China doesn't redefines it's standing it will only find itself alienated & ostracized by it's own doing.
    On a side note I don't see how ravaging threats & blindly seeking a very destructive war makes you stronger or better. A truly great country doesn't needs to be afraid, doesn't feels humiliated, can answer reasonably to other's doings (right or wrong) & above all can assume responsibility for it's own doings.

    October 5, 2011 at 5:55 pm |
  40. Andy

    Blaming currency for the trade deficit is not logical. The US forced Japan to raise their currency in the past, and yet our trade deficit with Japan continued to grow. Americans are just too lazy to work hard and want everything handed to them on silver platters.

    October 5, 2011 at 6:02 pm |
  41. Andy

    To the guy who made comments about Tibet. How about the US give back California, Texas and the SW back to Mexico? 160 years ago that land still belonded to Mexico. Tibet has been part of China for over 400 years since the Yuan Dynasty. Hypocrite much?

    October 5, 2011 at 6:03 pm |
  42. ProUSA

    These tariffs need to happen ASAP!!!

    Anyone who disagrees is in the business of out-sourcing or off shoring to make THEMSELVES money, therefore promoting near slavery conditions for the laborers of those countries and unemployment for the domestic population (which costs the government money).

    Bring manufacturing back to the States! Let us all make money!

    October 5, 2011 at 6:15 pm |
  43. TonyP4

    Can we risk another trade war and risk of pulling out the debt by China. The politicians cannot fix our problems and try to blame it all on China.

    http://tonyp4idea.blogspot.com/2010/03/appreciating-yuan.html

    October 5, 2011 at 6:37 pm |
  44. jason in S.F.

    thanks but no thanks for the anecdote. The U.S. needs to get tough with China. We've been bending over for the chinese for the last 20 years. Their policies have helped to destroy the once thriving manufacturing sector in the U.S. Our corporate controlled government is powerless to make changes to help bring manufacturing back because big industry is making a killing on exploiting overseas labor and repatriating income tax free. The interests of the middle class are not being represented. The chinese have been dumping their crap on us for too long and our impotent Presidents are either not capable or not motivated to bring us back from the brink. The longer we submit to China the harder it will be to free ourselves from this economic purgatory.

    October 5, 2011 at 7:24 pm |
  45. TonyL

    Maybe US Congress can decide on how much China should appreciate its currency. While they are on it, they may as well also allocate the annual budget for China. Since they are also economic expert and have a clear road map for their country, maybe they should also decide on what China should do in their five years plan.

    October 5, 2011 at 7:45 pm |
  46. Tonelok

    @Pianki
    It's easy to win cost war when your profit margins are higher because your saying your dollar is weaker than it is. Getting 20% more money for the same product because of lying about how much your dollar is worth is the real issue. They could still probably produce the products cheaper, but they want to bury the US competitors. Very sneaky.

    October 5, 2011 at 8:23 pm |
  47. ooas

    Over concentration on wars lead American to this. Also because of cheap labour in order to increase profit, companies relocated to South East Asia. Sorry it is too late,another world leader is emerging from Asia....Watchout. Americans have been sleeping for the past 25 years...........Wake up

    October 5, 2011 at 9:25 pm |
  48. Damman

    ProUSA, Tariff does nothing for the country as it only add to the cost of the goods if they are imported, do you know how much % of a tariff you need to put on a China made item compare to a similar USA made item? about 400%, so think about it, if a made in China TV cost $25 to make, sell for $150 or even at $100, compare to a made in USA TV cost $100 to make, and sell for $150. What would you choose to do? buy the cheaper item or the 50% more expensive item? You cannot have high standard of living with cheap prices, that is the fundamentals of economics. Do you expect everyone else in the world to be poor while you are richer than they are? All poorer countries want to be able to raise their standard of living, noone wants to be poor, but unfortunately the reality is that where there is rich, then there has to be poor.

    October 5, 2011 at 9:46 pm |
  49. Kumar

    Well I see the comments for this article is very intense and every one has used more words to voice their concern. I think for USA to survive in the future, we go to do what is good for our country first. I hope this is not for 2012 re-election stunt.
    Instead of government giving free housing, free food and free everything, why not ask the people who get money to work on some manufacturing units run by each state and city. Open a small manufacturing place in each and every city to manufacture something that city is capable off based on local resources. this way un-employment will become less, low paying jobs will not go abroad, people will have food to put in their plate. I HOME SOMEONE HEARS THIS AND act upon for welfare of this country.
    God Bless America first and then rest of the world.

    October 5, 2011 at 9:50 pm |
  50. Damman

    Kumar, that is a good start, government sponored manufacturing business that will employ anyone who wants to work, however, how many people wants to work for $5-10 an hour in the USA? (The middle class jobs are the one that are moved offshore not low paying jobs). If everyone is willing to take less money for crappy jobs then the economy will recover much quicker than people keep on telling themselves that they deserved more because they had a higher paying job before therefore they do not want to do the more meaningless jobs.

    October 5, 2011 at 10:12 pm |
  51. smiletogreet

    currency war is good for american now but in long run still face the same problem of labor cost ! unless trade door is shut down money will move lowest position for the most profit rewards !

    October 5, 2011 at 11:07 pm |
  52. near naco

    Most countries float their currencies. All major economic powers float their currencies. We don't need diplomacy, the world needs China to act like a major economic power, not a thief in the night.

    October 5, 2011 at 11:12 pm |
  53. witness

    For all those "monetarists" out there (Von Mise, Hayak,Freidmann,) the commies are closer to free market than the US.
    Just incredible....The US wants them to do what???

    October 5, 2011 at 11:16 pm |
  54. Alexander

    Americans, wanting 8 – 10 Dollars an hour, try 5 Dollars a DAY and you'll know what China is worth.

    October 5, 2011 at 11:48 pm |
  55. That'snotTrue:[

    One question to ask all Americans. Do you guys need ANOTHER war? You're involved in 4 or 5, I lost count after Lybia... but the point is do you need another kind of war when you're involved in soo many?
    One question for the Chinese. Do you have to care about what congress thinks when they made soo many mistakes?
    I can't answer the first one, but for the second one, why should they trust a government so backwards? Americans can accuse other countries' wrong doing all they want... but then again, from my knowledge of the US, the majority haven't even open up a history book, nor do know the internal affairs of other countries. "Americans have a lot of opinions, but they know very little about the rest of the world." Unfortunately, it is true from what I seen on the CNN forums, so WISE UP & FIX YOUR OWN COUNTRY'S PROBLEMS!!! BEFORE GOING OF ON OTHER COUNTRIES WHO DIDN'T CAUSE YOUR PROBLEMS.....The congress did. =.=

    October 6, 2011 at 1:10 am |
  56. empty

    why people are greedy to make money? why people are so selfish? god bless america first then rest of the world. god bless every needy people. if there is a god and if he/she is a good one then he/ she should go to those poor nations where people are dying of hunger instead to americans who complaints about self being poor and ask for more money when unable to replace his old car in two years time period. i don't want to see chinese people in the future follow the same path of usa and europe. bring change in the entire world..........live in harmony, peace........and remember that when we see the earth from the space there are boundaries.......there is only one country/globe, the mother earth.........rise above yourslef...

    October 6, 2011 at 2:59 am |
  57. empty

    * when we see the earth from the space there are NO boundaries..........*

    October 6, 2011 at 3:05 am |
  58. HowlinWolves

    Damn our stupidity is embarassing. Almost every good purchased in America contains something made in China, whether its the entire product, or the packaging or some components. If the idiotic Senate puts a tariff on all Chinese goods, everything in our stores will go up 20-30% overnight. That is called INFLATION fools. It will bring the US economy to its knees.

    If you want to blame someone, blame George W Bush and Dick Cheney. They are the ones that left this economic disaster in Obama's hands. No matter how the Republicans try to spin it, it's just the truth. Meanwhile Cheney's former company made more money from the war than any single company in history. Wake up and smell reality!

    October 6, 2011 at 4:14 am |
  59. Jeff

    Even if everything was equal, I have to say the Chinese just work much harder than the Americans. In the jungle world, you don't hunt, you don't survive. It's time for the Americans to come down to earth and work hard for livings!

    October 6, 2011 at 4:51 am |
  60. nicanor molina dolendo

    Not only China and U.S are in the midst of trade war but the whole world as well. It was creatively manipulated by the Chinese Theological system that wisely spread out around the globe and systematically controlled the trading system of the world with the designed and concept of Dragon Philosophy. They are monopolizing the economy of the world, through their secret weapon of wise Idea of the dragon, which bringing the world into chaos and or under the global standard of living. Competing the world trade system into their own systematic ways of sub-standard production of goods that maybe downgrading the standard of living. They are making trade production with low cost material and even imitations. They had finally won these kind of arena in the field of manufacturing as well as trading system. The world instead to left up our standardization and quality of life, They bring us into imitation and sub-standardization of living. This is the result of dramatic collapse of the global economy. W.T.O are their gate way to ruled out the world economy and bringing us all together into their magical mass production of sub-standard trades. The quality control of global standard is futile in action. Illegal merchant of Chinese people as well as pirates production are the major cause of economic collapse of the world.

    October 6, 2011 at 7:27 am |
  61. S1N

    I would prefer that the U.S. and China move toward a ground war, honestly.

    October 6, 2011 at 7:34 am |
  62. EA Marco Polo

    In 2010, the export in goods, Mainland China is 1581 billion, the US is 1289 billion. This year until now the gap is expanding fast.

    In 2019, Mainland China will become largest importer on the earth, bigger than the US and EU.

    In 2029, China's export will be double than the US; East Asia includes China will be a very big market. It is a historical destiny. You like or don't like, that is the future.

    October 6, 2011 at 2:21 pm |
  63. Jhon

    Do you really know what the democracy is? The population is at least 1.4 billion there in Chian, more than 50% are poor farmers, most of them just get enough to eat, all those people expend 1-2 dollars per day and just survived from inflation, these farmers has only less than 600m2 farmland to plant and then to support their family. So, they have to moved to deep mountains and forest where no people willing to live there in other countries only for surviving. No to mention the welfare you have here in US. We all just need to think about our own problem- Wall Street controlled everything today, created crisis, robbed the whole nations and other society both domestic and overseas only for their own interests, they are even not considering how to expend trucks of money. Probably what Wall Street really wants to do is to control the world economy and push currency-colonization to other nations, which are what I can conclude from the US’s China-policy.

    October 6, 2011 at 6:35 pm |
  64. Jhon

    I am sure that QE3 must be brougt out in next couple of months. No one include Obama can stop that. Beacuse Wallstreet will make people to believe QE3 will benefit you all and the rest of world, and make them believe that QE3 will save and pull over the world financial crisis. It's only a time to do that. To do these, the stock market will be hammered down, more bad news of EU will brought out, more cries to save the market from populace, then it's wounderful time for QE3 to born. That's really bad thing that the US government can not control, and will eventually lead US to long term economy-slump.

    October 6, 2011 at 7:17 pm |
  65. Ian Clark

    Unfortunately Western companies import low cost Chinese goods and mark them up to previous levels. Did your shoes get any cheaper? I just paid 1200 Australian dollars for glasses, while the same cost R1200 in South Africa. I am sure they would be even cheapest in China, and although they are branded with Western names, I am sure the frames came from China. That was seven times more expensive. USA is probably the same. South Africa was taken by Colonialists, USA and Australia as well, so people should step lightly when shouting the odds about other countries. Oh, by the way, compliance in the West kills business as well as the minimum wage. In Oz, it is $15 an hour to hold a traffic sign, what is the equivalent in your country. How much is a cooked chicken, or a beer? So many questions, so much debt, so many politicians!

    October 8, 2011 at 9:30 am |
  66. surfer

    If the US wants to get more jobs, this isn't the way to do it. Companies (jobs) can still go to India, Brazil, Indonesia, Vietnam, Laos, etc. Where they have much cheaper labor than US.

    October 10, 2011 at 5:31 pm |
  67. Strangewalk

    China has been fighting a very aggressive trade war with the world for nearly 30 years and has had everything its way. This is long past the point where it needs to change. The ONLY REASON this continues is that thousands of American companies operating in China are profiting, and they bribe politicians to turn a blind eye.

    According to Forbes (http://www.forbes.com/sites/beltway/2011/02/14/intelligence-community-fears-u-s-manufacturing-decline/), the United States has lost an average of 5,000 manufacturing jobs PER MONTH since China joined the World Trade Organization in 2001, and the ripple effect of 1 manufacturing job supports between 3 and 6 additional jobs in the service sector, not to mention the tax base implications. Thousands of formerly thriving industries in the United States have and are being totally wiped out, with millions upon millions of workers kicked out on the street. China uses every trick in the book to win trade battles. They deeply subsidize their domestic industries, they openly steal technology, they blatantly manipulate currency rates, they allow their citizens to be paid slave labor wages, they block imports with very high duties and require technology transfers by foreign companies.

    October 12, 2011 at 11:01 pm |
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