I had a mangled post on the euro and the US trade deficit here. Brad Setser has a much better one here. Brad has a good summary piece on China and the US here, and a summary of a recent trip to China here (both with Nouriel Roubini). I also have a piece on Afoe today about China and Europe:
So what can we learn from all this? That trade with China is a problem for those countries which have a preponderance of low value manufactured exports, since these are in direct competition with the nascent Chinese industries. Those countries who have competitive exports - UK, Germany, Netherlands, Finland, Sweden -are *not* threatened by China, indeed in these countries consumers can welcome the prospect of enjoying cheap manufactured products which they pay for by selling other products elsewhere. At root, I suspect the US problem is somewhat similar: some regions/states enjoy the benefits of trade with China whilst others see their economic livelyhood threatened. Unfortunately in the US system, those who are threatened seem to have a disproportionate political influence. I wonder whether one of the ironic consequences of the recent French vote will be that this same situation will *no longer* be the case here in the EU.
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