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That is the foundation of free trade theory. The US government should realize–some day–that imports that are cheap, whether subsidized or not, provide a net gain in welfare to Americans.
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Lavin was critical of the Obama administration for having provided a half-billion dollars in federal credit guarantees to Solyndra, now bankrupt, a California company with an alternative solar energy technaology. Bush’s second term.īut like many Republicans, Mr.
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Lavin, a longtime Republican who has held a series of appointments in Republican administrations, including overseeing the antidumping and antisubsidy investigations office when he was the undersecretary of commerce for international trade during President George W. “The methodology of this is not political,” said Frank L. The strange thing is, while US companies complain that Chinese companies are able to sell cheap because of government subsidies, the US companies are also receiving subsidies. This is an essential lesson in free-trade economics.Īnother trade issue has surfaced in the US, solar panel manfacturers asking for tariffs applied to Chinese imports. The savings might turn into better investment opportunities, and more demand for goods might come from either home or abroad. The savings that consumers enjoy from buying foreign goods allows them to either save more money or to buy more goods. The new Chinese trade surplus is being attributed to better growth in the rest of the world, particularly the US.įor skeptics who believe this is not good for the rest of the world, let me try–again– to explain. Like many predicted, foreign demand for Chinese goods has not been hurt very much by the increased value of the Yuan. Imports undershot expectations, growing 5.3 percent on the year in March – consistent with other data suggesting soggy domestic demand in the first quarter of the year – but the trade numbers overall reinforced the view of analysts that China’s trade-sensitive economy is set for a soft landing in 2012. The surprise return to surplus from February’s $31.5 billion deficit confounded expectations that trade would remain $1.3 billion in the red, with a solid 10.4 percent year-on-year bounce in sales to the United States helping exports grow faster than expected, customs data showed on Tuesday. Good news for China and the rest of the world too. Statistics from March surprisingly show a new trade surplus for China.