NYT and AAM Agree: Congress Must Deal with Trade Deficit

Posted by admin on 08/17/2010

A guest post by AAM intern Whitney Stack:

The lead editorial in the New York Times yesterday says what the Alliance for American Manufacturing (AAM) has been repeating for some time: current U.S. trade policy is not sustainable. The Times editorial US and Chinese currencies The lead editorial in the New York Times yesterday says what the Alliance for American Manufacturing (AAM) has been repeating for some time: current U.S. trade policy is not sustainable. The Times editorial was prompted by statistics released last week showing that the U.S. ran the largest trade deficit in June since October 2008, when the financial crisis hit. The Wall Street Journal reported that the trade gap widened 19 percent from just one month earlier, as imports rose 3 percent and exports declined 1.3 percent. Much of the imported goods were manufactured consumer goods like automobiles and iPads. If America is to achieve President Obama’s goal of doubling exports within five years, America must rebuild domestic manufacturing. The Make It in America program launched recently by Democrats in Congress must be implemented. And it is imperative that foreign currency undervaluation be stopped to rebalance the trade deficit.  China is all promises on resolving currency manipulation and no action so far. Here’s what the Times says about currency manipulation:
“The central bank announced in June that it would allow China’s currency to start inching up against the dollar — but it has risen less than half a percent. China must deliver.”
The Times is correct in its advice for resolving the international economic imbalances that are damaging the U.S. economy: “Chinese leaders have to finally rebalance their economy and rely more on internal demand and less on exports . . . Rich economies with big trade surpluses and the ability to sustain budget deficits — most notably Germany — need to spend more, not less, at home and abroad." ##

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