At TCS Daily, Philip Levy writes:
If one looks at the share of U.S. imports coming from broader Asia over the last decade, one sees that China's rise has largely come at the expense of its Asian neighbors.
If a new anti-dumping measure were to drive production back to Malaysia or Indonesia, it would cut the bilateral U.S. trade deficit with China. It would probably raise costs a bit for U.S. consumers. But that would be it. No change in the overall U.S. trade deficit. No new high-paying manufacturing jobs for American workers. Just a stain on the United States' reputation as a global leader toward free markets and an angry and defiant China with a still-undervalued exchange rate.
Given the clamor for action against China, though, it may be impractical to dismiss the whole bill just because anti-dumping measures would be ineffective. If we're determined to threaten China, we should do it with an action that will really work. Let me therefore offer the following amendment in lieu of anti-dumping: If, after a suitable period of discussions, the Chinese still refuse to revalue the renminbi, Congress will cut federal spending!
Unlike the antidumping measure, this might actually help. It would reduce the federal deficit, thereby raising public saving. That would cut the amount that the United States needs to borrow from abroad. Less borrowing from abroad would necessarily mean a smaller trade deficit. It would also be a lovely gesture of respect for the international norms that the Senators are so eager to uphold, since the United States has been repeatedly criticized internationally for fostering global imbalances by its excessive borrowing. And a cut in farm subsidies, for example, would do wonders to support the open global trading system the Senators are trying to save. And there would be no way for nefarious importers to evade this measure by moving operations to another country.
Now that would let the Chinese know we were serious.
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