Letter published the The Wall Street Journal:
Chinese Commerce Minister Chen Deming’s article, “Protectionism Doesn’t Pay” (op-ed, Feb. 20), is concerned about the possible rise of protectionism in the current world recession. Well he might be concerned. China has enormous trade surpluses, especially with the U.S. If American trade gurus attended to American interests, those surpluses would disappear. The U.S. needs an across-the-board tariff sufficient to bring U.S. trade into balance.
The 1930 U.S. Smoot-Hawley tariff is a false analogy. The U.S. ran trade surpluses throughout the 1920s and ’30s. In comparison, the U.S. has not had a trade surplus since 1975. Its trade deficit is now about $700 billion per year. The cumulative deficit is over $7 trillion.
Mr. Chen’s real concern is to protect China’s enormous trade surplus with the U.S., $256 billion in 2007. China manages the value of the yuan at about 20% below its real value compared to the dollar. This is equivalent to a 20% subsidy on China’s exports, and a 20% tariff on its imports. Please, Mr. Chen, peddle your crocodile tears about protectionism and Smoot-Hawley elsewhere.
Lawrence Briskin
Centerville, Ohio