However, the debate did highlight a distinction between GOP frontrunner Donald Trump and the rest of the GOP field on trade. As Trump called for cracking down on Chinese currency manipulation, other candidates - most notably, Marco Rubio—argued against Trump’s corrective measures.
As Trump explained: “China is ripping us on trade. They’re devaluing their currency and they’re killing our companies… They send their goods and we don’t tax it - they do whatever they want to do… [But] when we do business with China, they tax us… I’m totally open to a tariff. If they don’t treat us fairly, hey, their whole trade is tariffed… they’re sucking us dry.”
Economic analysis confirms that Trump is correct. For instance, in a 2014 report from the Economic Policy Institute, Robert Scott writes, if the president were to “initiate policies that would make currency manipulation costly and/or futile”:
“These policies could lead to exchange rate movements that would create 2.3 million to 5.8 million jobs over the next three years by ending currency manipulation by a group of about 20 countries, with China as the linchpin. These actions would create jobs in every state and in most or all congressional districts. They would boost GDP, boost jobs and reduce unemployment, and actually reduce the federal deficit by spurring economic growth—all without direct budget costs. No other policies could achieve this economic trifecta.”The way currency manipulation works is a foreign competitor, such as China, artificially lowers the price of its currency in a market manipulation in violation of trade rules in order to dump foreign goods in U.S. markets. When foreign competitors dump these cheap goods in American markets - often times targeting specific industries - American producers can be quickly put out of business forever, and the employees who work at those factories, in turn, will find themselves out of work as well.
As Senator Jeff Sessions pointed out in 2011, when he and a bipartisan group of Senators introduced the Currency Exchange Rate Oversight Reform Act of 2011:
“For years, China has been undervaluing its currency, which unfairly subsidizes its exports and puts American manufacturers out of business. The Alliance for American Manufacturing estimates that 2.8 million American jobs were lost to China between 2001 and 2010.”Click here to read the rest of the story
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