Friday, February 24, 2017

Trump Calling Chinese Currency Manipulators Says He Doesn't Understand The Global Economy

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The Trump Administration's policy of placing the US first in global trade, popular rhetoric that likely contributed to his 'unexpected' election, ignores the reality of specialization of resources, logistics, and labor of nations within the global economy. Border taxes or tariffs to protect domestic production, a move that forces made in the USA purchases, only subsidizes inefficient labor.  That is, labor unable to complete in the global economy. Protection of American production, the crux of Trump's protectionist and isolationists policies, will only reduce trade flows as the global economic contraction spreading from Europe expands and intensifies in 2017. Trump is clearly making the same mistake that the Hover Administration made in the early stages of the Great Depression.  It's highly likely that many politicians have even heard of Hover's Memoirs, let alone read Volume 3.  If they did, there would be a lot less failed attempts to micro-manage the invisible hand.

Headline: Exclusive: Trump calls Chinese 'grand champions' of currency manipulation

WASHINGTON (Reuters) - President Donald Trump declared China the "grand champions" of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing's foreign exchange practices.

In an exclusive interview with Reuters, Trump said he has not "held back" in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.

"Well they, I think they're grand champions at manipulation of currency. So I haven't held back," Trump said. "We'll see what happens."


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