Donald Trump has emerged in recent years as the nation's foremost China basher, going after the Asian superpower for undervaluing its currency and for taking American manufacturing and jobs ... Now, Trump has long complained about Chinese currency "manipulation" and has called for a large tariff on imports of products from China in order to bolster U.S. manufacturing. But he has also gone further, urging Americans to buy fewer products from China, claiming that Chinese goods are shoddy and maintaining that, in his own business dealings, he favors American manufacturing over Chinese manufacturing.
Trump claims he is running for the Republican nomination to be President. One would think candidates in that party would be singing the virtues of free trade as if it made everyone better off. But I would agree with Mr. Trump on the international macroeconomic issue that their undervalued currency does have at least a minor impact on U.S. aggregate demand. And no – everyone is not better off from free trade even if Chinese goods are high quality. But having just read Dani Rodrik’s The Globalization Paradox, let me suggest that Mr. Trump also read this excellent discussion so he might sharpen his questioning of the standard Republican talking points for free trade.
But I’ve left off Justin Elliot’s punch line:
So it's at least ironic -- and at most an example of gross hypocrisy -- that Trump's own line of men's wear, the Donald J. Trump Signature Collection, is manufactured in China.I discovered this after walking from Salon's offices to the large Macy's in midtown Manhattan, where an entire section is devoted to the Donald J. Trump Signature Collection of suits and ties. This particular corner of the store is decorated with an oversize portrait of Trump; the line promises to provide "the pinnacle of style and sophistication" and "the necessities to be boardroom ready all of the time."
The Census Bureau reports that we purchased almost $365 billion in goods from China last year of which over $59 billion was related to apparel and footwear. So Mr. Trump is not alone in sourcing apparel from China. And I’d never call his clothing crap even he does.
If the Chinese gave up using the yuan, and just used the dollar, would their currency still be undervalued?
ReplyDelete"claiming that Chinese goods are shoddy"
ReplyDeleteHe has seen his own shirts; he knows of what he speaks. (Even when buying an emergency shirt, I paid the extra $2 for another brand because all of the Trump shirts at Century 21 feel as if they are polyester, despite claims of cotton.)
If it weren't for the money, Trump's name wouldn't be on that excuse for menswear.
ReplyDelete"If the Chinese gave up using the yuan, and just used the dollar, would their currency still be undervalued?"
ReplyDeleteYES.
Labor is most certainly undervalued in China. The currency difference is one way to protect the value of labor in this country. Only when the US dollar cannot command the extraordinary amount of labor in China that it currently does will the American labor force be rescued. Only when the Chinese people refuse to take US money or when we collect a large tariff on imported goods will "we the people" be saved from the "yellow peril". That "peril" is the peril of overpopulation that drives wages to subsistence. Malthus got that right.
You're protecting the value of our labor by devaluing our currency?
ReplyDeleteThat is correct!!! Give that man a cigar. You might notice that labor is begging in the streets while the rich (that would be the people with all the dollars) have watched the real economy go into the tank. This devaluation should have been done with fiscal policy a la infrastructure development. But he party of the rich (the Republicans) won't have any of it. They yearn for the "good old days" of the depression when the rich ruled the world.
ReplyDeleteYou're protecting labor by devaluing the dollar. So my purchasing power is less, my savings are attacked, and my expenses are all bid up years before my wage catches up.
ReplyDeleteThanks but no thanks.