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Chinese Currency Bill Won't Spark Trade War

China will respond to pressure if the U.S. passes currency bill

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There's a huge misperception that China can produce cheaply because of "cheap labor." In truth, labor only represents a very small portion of the input costs of manufactured goods. In contrast, the currency advantage is HUGE-- it's the real reason why China can undercut U.S. manufacturers. This is what the American public needs to understand so as to better pressure Congress to act.

Steven Capozzola of NY 9:56AM October 13, 2011

It's rediculous to focus this argument on one country-China. There is not one ounce of evidence that a job in China is a job in the U.S. Raising tariffs on China does not mean that it will create a U.S. job. These jobs could easily go to other countries such as Brazil or India. Not to mention, the plethora of American businesses that use Chinese imports to make a finished product. What about those lost jobs? Also, there is no such thing as a trade "deficit". All the money that Americans use to buy Chinese goods must come back to America sooner or later. There would be no reason for Chinese to accept American dollars if they did not eventually buy U.S. goods or invest in American businesses (which the Chinese are greatly doing now). This investing doesn't show up on the trade "deficit" calculation. You could argue that investing creates and maintains more jobs than simply buying a good produced in the United States. And always remember folks, the Forgotten Man in all of this is the American Consumer.

Matt of CT 9:48AM October 13, 2011

Yes. China currency policy does efffect jobs in USA, but these rules can only help in one way but to improve manufacturing in USA Govt. will have to take lot of steps. How you can compete, chinees labour rate and power cost, these are very cheap there and very high in USA

Aamer 9:13AM October 13, 2011

This is such common sense that I'm suprised there's a debate. Everything we see is 'Made in China.' If some of those products were 'Made in USA,' we could create jobs at home. And the fact that China is cheating at the rules of world trade is unacceptable.

Steven Capozzola of NY 9:08AM October 13, 2011

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