- Apr 26, 2020
- United Kingdom
Exclude them from federal contracts, and leverage soft power. Negotiate treaties if it becomes a major issue.Trade wars do hurt. But what else can (should?) we do about things like China's currency manipulation?
But "currency manipulation" is a bit of a nebulous term. Governments influence the value of currency all the time; doing so was the very basis of monetarism in the 80's, under Thatcher and Reagan. Whenever a government engages in quantitative easing, it's intervening in the value of currency. To some degree it's an accepted power for a domestic government to have.
So where's the cut-off, for when this becomes harmful? It's up to debate. But the power of a government to influence currency value is not disputed. Which makes launching international trade wars around it a morally-dubious thing to do. You can't point to any rules broken, because they didn't break any rules; they just did something your current government didn't like much. How do you frame that in a diplomatic setting?
Whatever the case, if your specific concern is the wellbeing of American workers, you absolutely don't pursue a course of action which hurts American workers far more. And that is precisely what Trump did.