Paulson v. Paulson
Yesterday’s Wall Street Journal pre-view of Treasury Secretary Hank Paulson’s China speech was encouraging. Paulson emphasized the long-term “generational” relationship that we must develop with China and emphatically rebuffed the ideas and promoters of protectionism.
at the Intl Finance Forum in “Great Epoch City”
But today’s New York Times re-view of Paulson’s speech is more ominous. The story is titled, “Treasury chief delivers new warning to China.” It emphasizes the contentious dollar-yuan exchange rate issue, asserting that Paulson “used unusually forceful language in saying that China has kept the value of its currency artificially low relative to the dollar.”
We talk about the dollar-yuan here because the success or failure of American technology and the world economy often depends on these currency and trade issues. Exchange rates may seem like arcane stuff, but when grandstanding politicians — like Senators Lindsey Graham and Chuck Schumer — threaten to blow up international trade, and thus our livelihoods and security, with their 27.5% tariff on China, we should all pay attention.