Dan, I'm not an economist or an international-relations expert. I'm a layman by pretty much any definition. So all these discussions about China kind of go over my head, as they seem to assume some knowledge I don't have.

Where is a good place to go to get a layman's explanation on what exactly the situation with China is? i.e., what is China doing that we don't like? Why is China doing it? What is it we want them to do, and why? What happens if they don't? etc.

- Alaska Jack

Setting aside some of the other issues for a moment, consider this: The Chinese exchange rate policy makes their goods artificially competitive. The bill proposes to introduce measures to raise the price of Chinese goods through tariffs. It, in other words, propose a remedy to an existing distortion in free trade. What's the big deal? Is anything that increases consumer costs *regardless* of the other effects bad? Are cheap consumer goods the only legitimate economic goal of governmental policy?

Two Comments:

-First to Dan Nexon: The idea that the U.S. balance of payments can be solved through an adjustment of the Renminbi is a bit too simple-minded. I encourage you to read some of Nouriel Roubini/Brad Setser on the topic. Essentially, an adjustment in the currency wont help until we reduce import demand in our country. Adjusting the currency may have the unintended effect of shifting imports to other East Asian countries who have similar pegs. Moreover, until the markets adjust to the change in prices, we will simply be spending more for our imports (known as the "J" curve- I study IR, so if anyone reads this and finds something wrong, please correct it). Lastly, the trade deficit in and of itself may not be a problem if high growth continues. Our country needs to focus on reducing the budget deficit, which no candidate has yet addressed.

-Second, to Mr. Drezner. I understand your fears regarding the democrats trade policy. Support for the CAFTA was abominable, who knows how the S. Korea trade agreement will turn out. Both Obama and Clinton supported the Oman-US FTA. Clinton also supported the Singapore and Chile FTA. So there are some bright moments.

If we look back at this President's rhetoric on free trade at the time of the election in 2000, we find similar pandering to pick up votes. Particularly, the President promised to slap steel tariffs to pick up votes in states like West Virginia, handing him the election and defied WTO law. The President's policy tried to save an ever-failing industry. Like all protectionist measures in the U.S., the tariffs simply postponed necessary adjustments that our manufacturing industries need to make (our Auto industry is a shining example)

Why should we see this as indicative of their views rather than simply political opportunity?

Imposition of any trade sanctions would accelerate the pace of Asian economic integration and will most likely lead to a creation of a bond market to trade excess reserves. The question is - how would this suit American interests?

Do we really believe that Clinton or Obama could (or would) accomplish implementation of such sanctions against China if elected? As the post stated, "Brian Pomper, a former Democratic adviser, said China was becoming a proxy for US political anxiety about globalisation. . ." It is perfectly plausible to assume that it doesn't matter to Clinton or Obama whether such legislation passes of fails. They can say that they sponsored it, and that is what matters most in the campaign. It is hard to imagine that trade sanctions against China in order to revalue the renminbi would be a pillar in the presidency of Obama or Clinton. They are just doing now anything they can to get elected, including capitalizing on "political anxiety about globalization" by using tough talk and creating the perception of tough action.

Rhetoric spouted to win primary votes is not de facto policy. Respected bases on both sides of the aisle have become so radicalized that it now seems candidates race towards gibberish in wild attempts to garner sympathy from voters. You're seriously suggesting Dan that Clinton and the other guy doing a little China baiting that's obviously designed to secure votes in early primaries scares you more than, oh, let's say Rudy claiming he's uniquely qualified to fight terrorism because he stood on some rubble and talked tough? C'mon.

Dan, you're being naive, or biased. I hope the former. If you seriously think there's any difference among the frontline candidates with regard to China, you need to look more closely. Of course when a country has a massive trade surplus over the US, based in small part on slave labor and in large part on currency manipulation, that country is going to be a fat juicy target no matter what. Sure, we're going to have 18 months of nothing while this crooked disaster of an administration remains in office, more concerned with protecting itself from the law than with protecting the national interest, but do you really think politicians of either party are going to sit back and do nothing now that we're the largest foreign debtor in the world? And by the way, the Republican Party has gone completely nativist to a far greater extent even than the Democrats. At least the Dems just want to send the goods back to where they came from; the Republicans want to send the people back too.

Your mythical "American consumer" may also support this attack on China. Millions of them, including I suspect a disproportionate number of non-ideologically-committed swing voters given where they are, have been forced to take lower paying jobs because of outsourcing, and they're not happy about it. You evidently don't remember the powerful "buy American" movement of the 1980s and early 1990s, or people taking baseball bats to imported cars.

It's all very easy to read from an academic textbook. It has next to no connection with what is actually happening politically on the ground.

I agree with db above - because of cheap foreign labor I now have to work three jobs just to match former income from one, my quality of life is shot all to hell - how many of your academic buddies Dan are working shitty part time jobs in order to pay the bills? It's all very nice to talk theory and I'm not even going to content that the theories are wrong - but the guys in the trenches are the ones getting killed and as Rummy use to like to say about another war - we get a vote. Beware the insurgency of the disenfranchised working stiff.

If the freer traders are not careful Congress will be filled with soul mates of Sherrod Brown or worse.

The workers who are losing their jobs, homes, health insurance, pensions and etc. are not all that impressed with how fast the Chinese economy is growing, nor do cheap prices on cheap merchandise make up the difference.

With Chapter 11 being the newest route to dump unions and offshore jobs, look for the populist revolt to grow.

Even Krugman, the Yoda master of free trade, has figured out that workers are getting screwed.

Wow, a lot of these comments got vigorous. I am not sure what Prof. Drezner thinks, but I would imagine that many of the sentiments suggested in these comments he would agree with, regarding the "workers in the trenches" in the global economy.

The warnings of economists regarding protectionism are so powerful because politicians can easily use protectionist rhetoric to pick up votes, rather than making the tough choices necessary for reform. I would remind the commentators that free trade and reform are not mutually exclusive. Health Care and Social Security reform are at the top of the list, in protecting both workers and national business to global competition. Increased investment in education is also necessary.

My hunch is that Prof. Drezner was commenting on one aspect of a very complex issue.

Regarding outsourcing, the majority of jobs lost in the United States is not due to movement overseas, but rather from domestic issues like downsizing.

It is perhaps a little to easy to say that decreased pay is due to Chinese imports as well. That logic, in simple form, say while you may earn less, your prices are reduced as well, leaving you in overall parity

Working Stiff,

Is it possible that you are in some way responsible for what has happened in your career? Or, is it all the fault of "foreginers"? It's just that one seems easier to blame than the other...

Working Stiff,

Is it possible that you are in some way responsible for what has happened in your career? Or, is it all the fault of "foreginers"? It's just that one seems easier to blame than the other...

Why would it be welfare-reducing to introduce a policy measure - in this case a tariff on Chinese imports - in order to compensate for a pre-existing market imperfection (undervaluation of the renminbi)? It might reduce welfare in the United States, but wouldn't it also cause a theroetically more efficient reallocation of resources in China?

OK, now departing from fantasyland, doesn't the argument presented above by Drezner devolve to: it's sometimes okay to use threats against some countries because those countries are responsible and therefore the threat can be effective, but it's not okay to use them against China because China is irresponsible and the threats don't work?

I do recognize the logic of this, but it also seems to reward good behavior. To use the type of home-family based analogy that I enjoy so much from this blog's creator, it's as if a parent had two children who were misbehaving, but the parent only sanctioned/punished/restrained the one who would moderate his/her behavior and let the one who was determined to misbehave to continue misbehaving. Actually, as a parent I have often been guilty of this because it's convenient, but it's not exactly a morally or theroetically justifiable practice.

If such a policy is implemented and China refuses to acquiesce, then the government will be collecting a lot of taxes and not borrowing as much. Imports will be more expensive, as in fact they should be, and we will have increased our savings rate. It is unlikely even interest rates would change. What will China's response be? Import less? Quel difference! Much ado about nothing.

Gene,

OK, now departing from fantasyland, doesn't the argument presented above by Drezner devolve to: it's sometimes okay to use threats against some countries because those countries are responsible and therefore the threat can be effective, but it's not okay to use them against China because China is irresponsible and the threats don't work?

If I understand this post correctly, D. Drezner is saying that threatening smaller countries might be okay and might work sometimes because these countries have no alternative. It´s different with China because China is a large country / economy. Not to mention that China got around a trillion dollars in their foreign reserve. If the USA annoy them, they might retaliate. Is that blackmail?