CREATING "FAIR TRADE" (Excerpted from Free Trade.)
Our tariff on Chinese imports is 2.5%; China's imports from us, 25%.
The simple solution is that we declare that we are committed to fair trade and as part of that we will match any tariffs from any country we do business with.
It is the choice of any country what tariffs to maintain. We will simply match them. If China moves down to 2.5%, then that's fine. If they don't move, then we simply do what is fair and raise our tariffs to 25% - who can complain about equality or say it is unfair? This would create a substantial number of jobs here in the US also, as American goods will become relatively cheaper compared to the higher costs of Chinese goods for Americans. If China drops their tariff rate, we get more American jobs because our goods become relatively cheaper in China so we need to produce more goods here.
It is "stupid" to be cautious and keep such disparities in place. If someone can give me a good argument for maintaining the disparity, please add it as a comment on the blog (see home page).
THEIR CURRENCY BEING "TOO LOW"
We can suggest, but we can't dictate that they raise their currency. Their currency being held artificially low means that our goods are made to be even more expensive in China, meaning they will buy even less. And it also means that their goods are cheaper so that we buy even more.
Our annual trade deficit is incredible: We import from them $350 billion
They import from us 82 billion
Recently, they agreed to buy $45 billion from us, but it is unclear over how long a period of time. As beggars, we get peanuts.
THEIR GOODS ARE ACTUALLY PRODUCED CHEAPER
Because of lower wages, even without their subsidies and currency differences, they can produce goods cheaper than we can, so we would of course buy more from them than they buy from us. And they also have less of a consumer market at this time, so they would buy less from us. We can't tell what the actual effect of this, which is fair, would be until we remove the imbalance in tariffs.
DO WE HAVE THE RIGHT TO INTERFERE IN THEIR INTERNAL AFFAIRS
To put it in one word: No!!!!!!
It would be pompous, arrogant, and self-centered to believe that others should conform to what we think.
Even the President of China requested that, in his visit on 1/19/11, referring to us "not interfering in our sovereign matters."
Yes, we can try to convince them of the benefits of being more respectful of human rights, but not to "make them wrong" or be nasty about it. They have their own beliefs and ways of doing things.