“This approach that Bill described could lead us down the sad spiral,” he said. “If you set aside the how, and think about end state, it’s costly and disruptive. It’s a bumpy road between here and there. It’s costly for U.S. companies that have a presence in China, who have to unwind their operations abroad. It’s costly at the consumer level. And it’s significantly more expensive for the manufacturers that Trump prizes, because their inputs will be more expensive.
If you set aside the how, and think about end state, it’s costly and disruptive. It’s a bumpy road between here and there.
Cronin said the thinking was Japan would be overly protectionist and would try to drive too hard a bargain.
Trade and economic and strategic issues in Asia are interrelated, You can’t disconnect them well.
Aside from the issue of whether telling Beijing to stop intervening on their currency value would actually help the U.S. economy, Olson said that forcing China’s hand in such a way “could open a Pandora’s box of potential actions China could take if that is initiated. Perhaps they’re waiting for the Treasury Secretary to be approved, or they might have started to appreciate what they’d be inviting if they follow through.”
Currency was a good issue 15 years ago. Is China intervening? Yes, but they’re propping it up, not bringing it down.