US senators drop China tariffs bill, told revaluation coming

[maddezmom]

WASHINGTON (AFP) - The US administration and Federal Reserve chief Alan Greenspan believe China is set to revalue its currency, two US senators said after agreeing to shelve an anti-China tariffs bill for now.

Senators Charles Schumer and Lindsey Graham, after a meeting with Treasury Secretary John Snow and Greenspan, agreed to put off a late-July vote on their tariffs bill after being assured that a revaluation is coming.

The Senators had been assured that the revaluation "could well occur in a very short while, in the next few months", said Schumer, an outspoken Democrat who has been campaigning for strong US action against Chinese trade practices.

He said the top officials gave an undertaking to him and Graham, a Republican, that China should shortly "be on the path to revaluing its currency".

more: http://news.yahoo.com/news?tmpl=story&u=/afp/20050630/wl_asia_afp/uschinaforextrade_050630223019

[UpInArms]

1. sounds like verbal intervention to me,

but what do I know :shrug:

[teryang]

2. Yeah, right!

Revaluing the currency will do nothing but increase American inflation.

[amandabeech]

7. Some manufacturing might move out of China to other low wage

countries, like Vietnam. Alternatively, perhaps Mexico and Central America will become more important manufacturers for the U.S. market, especially CA if CAFTA goes through. Many plants left those countries when China opened up. If plants reopened, it might enable more Mexicans and Central Americans to remain in their home countries instead of coming here.

I would rather pay more and buy less stuff if my purchases supported good jobs in the U.S., but that is not expected to happen. Alternatively, I think that it would be better if our cheap imports came from a variety of countries and not, seemingly, just China.

China will increasingly become a competitor for oil and gas, and of course, there is the possibility of problems over Taiwan. There is even a tiny threat that the current difficulties between China and Japan over oil and gas rights in the waters between the two could flare up, in which case I believe we are obligated to help Japan if they ask. The less we depend on them for key goods the more room we will have to maneuver if serious rifts occur.

[Karenina]

8. Higher prices for cheap goods?

:shrug:

[pilgrimsoul]

3. Could this be a bit of quid pro quo?

China revalues its currency in exchange for Bushco allowing them to buy Unocal without a hassle? Damn, that's a new level of evil even for the neocons.

[Deja Q]

5. Without getting IN to politics, I know a lot of people on BOTH SIDES who

are very concerned about Unocal being sold.

Can't blame them, that would lead to a kick in our economy's 'nads...

[UpInArms]

6. China needs to spend all the dollars that they are holding

before they become toilet paper.

(jmho)

[Deja Q]

4. I recently read 2 yahoo 'news' articles that were FUD.

Fear
Uncertainty
Doubt

I'll wait and see.

[movonne]

9. I'm wondering if they are lying to us....maybe China has threatened

us not to put tariffs on them...it seems to me they are holding all the cards..

[necso]

10. I'm so looking forward

to that (anticipated) slowdown in the growth rate of Chinese imports in the medium term. Of course, the trade deficit (measured in then-current dollars) will go up, perhaps dramatically -- but as for that medium-term (anticipated) slowdown in the growth rate, I'm all hot and bothered for that.

If this is the best that our economists can come up with, then it's time for some new economists -- or maybe flipping a coin -- at least then we might be right part of the time.

[necso]

11. Oh, and only idiots let speculators

value their currency.

Because speculators will inevitably seek to make money, not merely by buying and selling goods in the respective countries (which resembles work), but by trading currencies (which is gambling -- gambling largely, in practice, with other people's money, and in comfortable circumstances without suffering significant inconveniences). And in this process they will extract profits (often considerable profits) that come at expense of those who depend on these currencies.

This speculation is not a process of creating new wealth, or creating new businesses, or increasing supply or demand -- it is a means of redistributing wealth to the speculators.

BTW, the speculators want (at least) a gain equivalent to what they made on the Euro. They might get half of that -- and then they will push for the other half.

Unfortunately, China's relative advantage (and relatively increasing advantage, what with economies of scale, new infrastructure, and all that) is probably rather greater than this.

[lovuian]

12. That 27 % tariff scared the Corporations to death!!!

but did it scare China!!!

maybe the deal is Unocal for floating the yuan!!!

[necso]

13. I wouldn't be

at all surprised if we do swap approval of the Unocal deal in return for China revaluing her currency. (Delaying one end as cover?)

The oligarchs are determined to jack up the prices that the people pay for Chinese goods. -- And some of these oligarchs will make out on both the export and domestic sale ends of the deal. (For the future, the oligarchs care nothing -- because they will remain, in their own eyes, above and untouched by all the harm that they do.)

And this is also just about the last big currency speculation that's left to pull off. (Provided that foreign nations continue to generally support our currency as they have been and are doing.)

Now mind you, something needs to be done about our deficit problems. But when you are looking to solve your fiscal problems, you do not let looters call the shots.