Sino-US Trade: Moving Closer to a Showdown

Channel News Asia reports:

The growing sentiment in the US Congress to penalize China for its currency policies is fueling worry among economists over trade frictions that might lead to serious consequences for both
countries.

Analysts say a bill unveiled Wednesday, which would punish countries with "misaligned" currencies and not only those that "manipulate" exchange rates, highlights wide bipartisan support for measures to deal with the massive trade deficit with China.

But many economists say such measures would be counterproductive and threaten the growing ties between the two economies on trade and investment.

"These kinds of punitive measures would be shooting ourselves in the foot," said Nariman Behravesh, chief economist at the research firm Global Insight.

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