Since China entered The World Trade Organization (WTO) in 2001, the extraordinary growth of U.S. trade with China has had a dramatic effect on U.S. workers and the domestic economy. The United States is piling up foreign debt, losing export capacity, and the growing trade deficit has been a prime contributor to the crisis in U.S. manufacturing employment. Between 2001 and 2008, 2.4 million jobs were lost or displaced, including 91,400 in 2008 alone, despite a dramatic decline in total and bilateral U.S.-China trade deficits that began in the second half of that year....
1. China's persistent manipulation of its currency is a major distortion in the international marketplace.
You laid out the policy China has, which is mercantilism, not free trade. And when we ask that people do something about it, whatever administration, they shrug their shoulders and say, "Well, nothing much we can do."
China is deliberately keeping its currency artificially weak.
Clearly, nothing will happen until or unless the United States shows that it's willing to do what it normally does when another country subsidizes its exports: impose a temporary tariff that offsets the subsidy.
President Obama's current hide-the-pea approach regarding China trade is of course in complete contradiction to Candidate Obama's promises throughout the '08 campaign, which he most notably advanced in a speech he gave to the United Steelworkers on July 2, 2008. In that speech he said: "Change is knowing that for trade to work for America, it has to work for all Americans; that we have to stand up to countries that are manipulating their currency or flooding our markets with subsidized goods; that it's wrong to have a 'one-size fits all' trade policy that treats countries as different as China and Mexico as if they were the same; and that our job ends not when a trade deal is signed, but when it's enforced."
[W]e need to finally confront the issue of trade with China. As I've said before, America and the world can benefit from trade with China. But trade with China will only be good for you if China itself plays by the rules and acts as a positive force for balanced world growth.