Unlike trade, political bickering with Chinese will cost US jobs
Friday, April 16, 2010
Everybody knows that the obsession in Washington D.C. with the valuation of the Chinese currency is a proxy for concerns about the American bilateral trade deficit with China and the oft-cited, but inaccurate, perception that “unfair” Chinese policies are “stealing U.S. jobs”.
Well, this piece of research (opens PDF) echoes previous analyses, that predict a revaluation of the Chinese Yuan would actually harm U.S. jobs. This Reuters summary makes for unhappy reading for protectionists inside and outside the Beltway: “Because so many U.S. exporters buy parts and components from China …revaluation would raise their costs, resulting in a hit to U.S. exports that would cost 424,000 U.S. jobs.” This confirms what we already know.
Furthermore, if the American protectionists get what they want – a sweeping tariff across all Chinese imports – American jobs would certainly disappear: “If the U.S. imposed a 10 percent tariff across the board on Chinese imports and China responded in kind with a similar 10 percent duty on U.S. exports, 947,000 U.S. jobs would be lost.”