The mercantilists in Washington are no longer just targeting China, Europe, and North American partners. The protectionists will not home in on countries that have undervalued currencies.
So, pretty much any state that is an exporter will eventually be slapped with tariffs.
According to a proposal outlined in a Federal Register notice, the U.S. government would allow American firms to apply for anti-subsidy tariffs on product from other nations that are deemed by the Treasury Department to be devaluing their currencies.
Right now, the Treasury has not listed any nations. However, President Donald Trump has often accused China of purposely debasing its currency, though the numbers did not prove his supposition.
Commerce Secretary Wilbur Ross said in a statement:
“This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm U.S. industries. Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses.
“In determining whether there has been government action on the exchange rate that undervalues the currency, we do not intend in the normal course to include monetary and related credit policy of an independent central bank or monetary authority.”
More from Bloomberg:
According to people familiar with the administration’s internal deliberations, the move to include the new currency tool has been pushed by Ross and White House trade adviser Peter Navarro since the early days of the Trump presidency.
The issue had been lying dormant for awhile before it rose to the top of the Trump team’s trade discussion again in recent weeks, a person familiar with the matter said. The inter-agency debate leading to the issuing of the proposal was heated, the person said.
That it is now advancing is a sign of the resurgent power of trade hawks in the administration as the White House ramps up pressure on China for a trade agreement.
This month, the sides were close to a deal when the talks hit an impasse, prompting Trump to increase tariffs on $200 billion of Chinese goods and threaten to slap duties on another $300 billion, as well as add Chinese telecom giant Huawei Technologies Co. to a blacklist.
Democratic lawmakers have also pushed for such changes to trade law to address currency concerns for years but never garnered enough support to pass legislation.
Hey, if other countries want to destroy their currencies and export even cheaper goods to the United States, then shouldn’t this be celebrated?
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