ManufactureThis’ friend, Sen. John McCain, is traveling to Bogota today to help promote a free-trade agreement with Colombia.  The senator has been vocal in his support for a deal with Colombia, which he believes will be a boon to the U.S. economy.

While the good Senator is flying south, ManufactureThis wants to suggest that bigger problems lay to the east.  Secretary of State Condoleeza Rice is currently in Beijing, where Premier Wen Jiabao has expressed significant concerns about the weak state of the U.S. dollar.  Premier Wen was quoted this morning by the Wall Street Journal as saying that the Chinese “hope the U.S. will quickly pass through the subprime crisis and stabilize the exchange rate of the U.S. dollar; this is of great importance to the world economy.”

Notwithstanding Sen. McCain’s passing interest in economics, it would seem that he’s currently talking to the wrong country.  Two-way trade with Colombia in 2007 added up to $18 billion, with the U.S. charging up a mere $876 million in trade debt.  By contrast, U.S.-China trade hit $386 BILLION, and most of that ($256 billion) racked up as increased U.S. debt. 

It’s because of the huge overall U.S. trade deficit that investors are losing confidence in the dollar.  Ironically, China has continued to manipulate its currency, in violation of the free market, to continue its huge trade advantage.

If Sen. McCain wants to steady the U.S. economy, he should consider a longer plane flight—one that will take him straight to Beijing, where he can firmly remind Premier Wen that Beijing’s currency finagling has been unraveling world markets for a number of years.

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This entry was posted on Tuesday, July 1st, 2008 at 6:16 pm and is filed under Holding China Accountable, Currency Manipulation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.