Understanding the Sources of Friction in U.S.–China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment | Zendy

Wing Thye Woo | Zendy

Open Access

Understanding the Sources of Friction in U.S.–China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment

Author(s) -

Wing Thye Woo

Publication year - 2008

Publication title -

asian economic papers

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.522

H-Index - 15

eISSN - 1536-0083

pISSN - 1535-3516

DOI - 10.1162/asep.2008.7.3.61

Subject(s) - renminbi , china , economics , exchange rate , welfare , unemployment , international economics , unemployment rate , international trade , monetary economics , macroeconomics , political science , market economy , law

China has been accused of exchange rate manipulation that has caused large U.S. trade deficits, which have reduced U.S. welfare by increasing unemployment and reducing wages. In fact, the strong claims by some observers that the trade imbalances are deeply deleterious to China's welfare almost make it a moral imperative for the United States to use tariffs to force an renminbi (RMB) appreciation for China's own good. (c) 2008 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

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