President Obama has been critical regarding themonetary policy of China. But now, critics are voicing disappointment.


The Obama reign may prove to be a turning point in the US trade policy with China. Earlier Obama had assured to consider the impact of Chinese trade onthe countrys economy and jobs. Experts' opinion says that Obama would like to implementstrict policy measures to tackle the Chinese currency manipulation and unfairtrade practices. The new policy would bring strict implementation of antidumping, and unlawful subsidy laws relating to imports from China.


During his presidential campaign, Obama was critical aboutthe monetary policy of China. He pledged to be tougher on China than President Bush. At the beginning of the year, officials of the Obamaadministration remarked that recession was not a time for trade wars. Thereport released by his Treasury Department did not mention China as a currency manipulator. Economists believe that China is deliberately keeping itscurrency value down so as to trim down its export costs. They observe that,this will help the Asian giant to maintain its growth in the shrinking globaleconomy.


But, currently the President has signaled his willingness torestrict the surge of Chinese exports into the country. His administration hasrecently announced to bring its first case against China in WTO (World TradeOrganization) if discussions do not solve the issue. It states that China isunfairly restricting the exports of its raw materials, which have a desperaterequirement in the U.S. China is defending itself by saying this was only toprotect the environment, and improve the composition of its exports.


Apparel brands manufacture textile and apparels in a quotafree environment. Quota restriction on 34 textile and apparel import categoriesof China which was established during 2005 has been removed. In the currentatmosphere, possibilities exist that protectionist barriers might result intrade wars.


Now, the question that arises at the back of the mind is "WillObama take a tough decision on the US trade relations with China?" The answer lies on how the President decides to handle the '421 safeguard' case by thisSeptember. Section 421, Trade Act of 1974 (China Safeguard Investigations)states that the Commission determines whether imports of a product from Chinainto the United States in increased quantities or under such conditions arelikely to cause or threaten to cause market disruption to the domesticproducers of like or directly competitive products. If the Commission makes anaffirmative determination, it proposes a remedy. The Commission sends itsreport to the President and the U.S. Trade Representative. The President makesthe final remedy decision. (Source: http://www.usitc.gov)


Political critics observe that from the earlier historicalrecords, Ronald Reagan, George W. Bush, and Bill Clinton have earlier declaredduring their election campaigns that they would change the export policy of USregarding China, but were not able to do much later on. Obama's priorities willbe more focused towards handling the faltering economy, and facing countrieslike Iran, and Russia. It might be unfeasible for the President to make a bigchange in Chinas export policy.


References:


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