One Step Closer to Trade Sanctions Against China

Derek Scissors / June 07, 2010

Tick, tick, tick — the sound of a Congressional trade bomb. By its own, not very exacting standards, Congress has patiently waited for change in Chinese currency policy. The single most likely time for that was the G-20 finance minister’s over the weekend in South Korea. But nothing meaningful from Beijing. Again. From now until summer recess, Congress likely will be working toward punishing China.

The frustration is understandable. The U.S. has played the indispensable role in rapid Chinese economic development, if for our own reasons. We’ve received cheaper goods and a check on inflation and China has received millions of its best jobs. The combined Sino-American trade deficit over the past 30 years is roughly $2 trillion. Most of that is held in U.S. bonds, but it’s still China’s money — money that could be earned from American consumers and no one else.

In return, the PRC is uncooperative on North Korea, Iran, military-to-military contact and a host of other security issues. This is not surprising. What’s surprising is Beijing won’t even throw the U.S. a bone on most economic issues. The yuan has become a symbol of Beijing’s willingness to cooperate. (more…)