Paulson cautions against anti China trade bills
08 Aug 2007
US Treasury Secretary Henry Paulson yesterday cautioned US law makers that passing protectionist trade laws aimed at China in a bid to protect American jobs would be a mistake.
Paulson, who is just back from a four-day visit to China, also decried what he called an increasing trend of protectionist sentiment in the United States and elsewhere. He said a rapidly changing economy would lead to some job losses and dislocations, but that can in turn open the way for more job creation in other sectors.
"But making trade a scapegoat and enacting protectionist legislation would make us worse off," Paulson said. He advocated negotiations were a better option. He said he had pressed Chinese leaders last week "to move more quickly to adopt market-oriented reforms which would reduce their trade imbalance with the United States."
However, senate finance committee chairman Max Baucus, told reporters that Congress would pass currency legislation to allow duties against goods from countries with "fundamentally misaligned" currencies regardless of any progress that Paulson makes in negotiating with Beijing.
He said, "China needs, at the very least, a nudge." He said, "No country out of the goodness of its heart ever lowers a trade barrier," and that the senate finance committee bill would help Beijing more quickly "do what it knows it should do" and stop keeping its currency artificially low.