If china does not allow the yuan to float? Aint that protectionism

Discussion in 'Economics' started by noob_trad3r, Nov 16, 2009.

  1. I am not an economist but To me that seems like China is putting a tariff on US goods coming into china.

    So why is it that Obama does not explicitly point this out?

    If they artificially depress the Yuan 20% against the dollar, to me that would by the synthetic equivalent to a 20% import tax on US goods.

    Why do we keep harping free trade when it is not.
  2. kxvid


    The Yuan may be undervalued, but it's undervaluation only suppresses labor costs. Chinese business still have to pay the same for raw materials as their counterparts in Europe and the US.

    So what does it matter if Chinese factory workers gets paid the equivalent of $.50 a day versus say $.70 if the yuan appreciates? Labor costs will still be ridiculously cheap compared to Europe, US and other "core nations".