A US-China trade war? Not yet.
Recent get-tough moves by the Bush administration are meant to avert a worse crisis – and to ameliorate Congress's concerns about a growing trade gap.
The Bush administration has hardened its posture toward China on the sensitive issue of trade, but the move reflects a tactical shift rather than a fundamental change of strategy.Skip to next paragraph
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In recent days, US trade officials have filed formal complaints of copyright violations and imposed penalty tariffs on imports of glossy paper.
More get-tough moves may follow, including continued pressure on China to adjust the value of its currency, the yuan, which many US economists believe is artificially low by design.
Such moves, however, don't represent a White House pullback from the strategy of open trade with the world – including with a nation that last year exported $233 billion more goods to the US than it bought from America. Rather, analysts say, it reflects changing political realities, notably a new Democratic Congress that will have a say on trade policies for the rest of the Bush presidency.
Other Republican administrations have taken a harder line on trade at times of public concern that imports are threatening US jobs and industries. The question is whether the change will serve to patch up a frayed consensus on the benefits of global commerce.
"It's happening now because [Congress] increasingly intends to fight over control of trade policy," says Fred Bergsten, director of the Peterson Institute for International Economics in Washington. The Bush team is "looking to enhance their credibility."
The new assertiveness could score points for President Bush as he tries to get Congress to renew support, by June 30, for the White House to have "trade promotion authority."
This provision pledges Congress to vote promptly and without amendment on accords to expand trade. Because such trade accords often involve myriad trade-offs among various economic interests, such fast-track authority is crucial to the administration's ability to move forward on trade pacts such as one struck this month with South Korea, or the stalled Doha Round of global talks on trade liberalization.
Preempting an angry Congress
The altered tone toward China is also a preemptive strike.
By demonstrating that his administration is acting on several key tension points with China, Mr. Bush may be able to avoid seeing tough legislation come across his desk this year. Some lawmakers would like to impose trade penalties for alleged currency manipulation, if Beijing is unresponsive to overtures by the US Treasury Department.
"The attempt is to let some air out of the political pressure" in Congress, says Charles McMillion, an economist who tracks China policy at MBG Information Services in Washington.
Political restiveness on China has been growing, however, despite a generally strong US economy with low unemployment.
"I don't think the trade issue is going to go away," Mr. McMillion says. If the economy slows, as some believe it will, "the pressure will only get louder."
American attitudes on globalization can be ambivalent, mindful of both the benefits of falling costs for flat-screen TVs as well as falling employment at Midwest factories.
But in an NBC News/Wall Street Journal poll a month ago, 48 percent of American adults said the nation is "being harmed" by the global economy, versus 25 percent who said the nation was benefiting.
China is the focal point for that concern.