When the going gets tough, the politicians get protectionist.
In a meeting Thursday with Chinese Prime Minister Wen Jiabao, President Barack Obama basically said that China better make its currency stronger, or else. And Wen Jiabao basically said, we’ll revalue our currency, the renminbi, when we’re good and ready — not when some American dude comes over to try to tell us our business.
In broaching the China currency issue, Obama joins a host of other American officials, including Treasury Secretary Tim Geithner, in rattling the sabre over what experts say is the renminbi’s artificially weak valuation.
And it’s not just the executive branch that’s taking the trade fight to China. The House Ways and Means Committee is expected to vote today on a bill that would place duties on China’s exports as a counterweight against the alleged currency manipulation.
The economic wisdom of poking at China with trade-war threats is questionable, but with midterm elections coming up soon, legislators have to be able to tell their constituients they tried to do something about dire unemployment rates and bleak growth prospects at home.