Anyone who still believes that the revaluation of the yuan is the magic bullet that is going to save US manufaturing needs to read this trade briefing paper from the Cato Institute, a libertarian thinktank in Washington, DC. In it, the case against Senator Chuck Schumer’s proposed punitive tariffs against China is laid out carefully and thoughtfully. Some highlights:
Most importantly, the paper argues, "sanctions of the kind being contemplated in Congress would also violate the same set of international trade rules that members of Congress accuse China of violating", and furthermore, they would invite retaliatory measures from China. Do we really need a trade war between two of the biggest and most dynamic economies in the world?
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