The slow growth in the u.s. raises the protectionist threat: Economist

China shipping containers to lie down on the dock after being imported to the United States in Los Angeles, California, 7, October 2010.

Credit: Reuters/Lucy Nicholson

Washington | Tue Apr 01, 2011 3 Moon

Washington (Reuters)-the high unemployment and weak economic vtirof can convince policymakers of the United States to slap protectionist duties on imports from China around the world, the Economist said Tuesday.

"Protecting trade is far from being an ideal policy, and is subject to serious hazards, but current circumstances it may offer America is the only way out of its difficulties," Paul Ashworth, Chief Economist for economy in the US capital in Toronto, said the analytical note.

To a large extent have exhausted financial incentives for fiscal and economic growth of the u.s. Congress, President Barack Obama made two hours looking at trade measures aimed at denying the benefit derived from currency trading in China, "said Ashworth.

Republican presidential candidate Donald Trump has been called a possible for the United States to slap tariff 25 percent on Chinese goods, it would violate the commitments made to the United States on the World Trade Organization.

Senate majority leader Harry Reid and other newly returned from his party said on Tuesday they pressed China to allow its currency to grow more quickly in order to promote trade between the two countries into balance.

"China's currency policy has caused the exchange rate from the guard the cost of Chinese products artificially low and the cost of u.s. exports to China higher unfair, making it harder for businesses in the United States to compete with China in the global bamida ????"?????? said in the statement also noted Beijing had confirmed plans to ??????"????? its ?????"?? currency.

Ashworth noted that even with the current low u.s. recovery, u.s. trade deficit has already expanded once again more than 3 percent of gross domestic product again climax of 6 percent of GDP.

Who could lead his party to consider the rate as a way to reduce the deficit, beginning with legislation that clear the way for the United States to use countervailing duties against China's undervalued exchange rate, he said.

"As it is today, we could see this being passed, Bill some time in 2012 when elections (presidential, Congress) in progress," Ashworth said.

"When these measures are limited to do little to stem the rise of the global trade deficit, or perhaps even-sided with mindfulness, we expect Congress to agree on a set of sanctions targeting China alone, or perhaps a wider range of Asian manufacturers at ????"??? said.

Because it is likely to run afoul of world trade rules, the logical next step would be a debate in the United States should pull this organization, he said.

The preferred solution would be for China to take steps to encourage its domestic demand, such as allowing its currency to appreciate significantly more "against the dollar," he said.

"The solution" you-selects for the United States to offset this advantage of China's currency by slapping tariffs on goods, Ashworth said in an interview on the phone.

(Reporting by Doug Palmer; editing by Chizu Nomiyama)

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