China Expects to See a Record Trade Deficit in March

While the U.S. is blaming China as a currency manipulator, China expects to announce a trade deficit for March.

What would a trade war with China accomplish for the U.S.?

From China Daily:

The country will probably see a "record trade deficit" in March thanks to surging imports, Minister of Commerce Chen Deming said on Sunday, while warning that Beijing will "fight back" if Washington labels China a currency manipulator.

Speaking at the three-day China Development Forum that ends on Monday, Chen said: "I believe there will be a trade deficit in March" - which will be the first since May 2004.
After China's exports rebounded in December, US legislators and economists have been demanding the Barack Obama administration label China a currency manipulator in a US Treasury report due out in mid-April, which will make it possible for Washington to slap duties on Chinese imports.

"China's trade surplus with the US has been turned into a key excuse by American economists to pressurize the Chinese government to revalue the yuan," but, ironically, the calls have been growing stronger even as the "surplus keeps falling", Chen said.

"It's not rational (for China) to revalue the yuan, as it would hurt both Chinese exporters and American consumers."

"If the (trade) issue is taken to the WTO, China will respond actively," Chen added.

"China, of course, wants to buy more to balance trade, but it is a pity there are so many things that we cannot buy from the US. The US has set restrictions on exports three times, and it added several categories in 2007, such as computers, aerospace technology and digital machine tools," said Chen.

Nobel laureate and economist Joseph Stiglitz told China Daily on the sidelines of the forum that many other factors, such as restrictions on high-tech products, rather than the exchange rate contribute to the US deficit with China. He called on Washington to relax the curbs to balance trade.

http://www.chinadaily.com.cn/china/2010-03/22/content_9619515.htm

Meanwhile, William Black explains ten steps to reform the U.S. financial sector in a four part video series.

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