Protectionism will not create US jobs
The US Senate passed the Currency Exchange Rate Oversight Reform Act of 2011 on Wednesday, demanding the US government impose punitive tariffs on its main trading partners whose currencies it considers undervalued.
The bill is widely believed by the outside world to be a means of pressuring China to accelerate appreciation of the yuan. The Chinese government has expressed firm opposition to the move, saying it is a kind of protectionism and will compromise the interests of both countries.
It is the logic of some US Senators that China has artificially undervalued its exchange rate, a move that they say is equivalent to subsidizing its exports and giving its products an unfair advantage in the US market. They say China should raise the value of its currency at a faster speed, or receive punitive duties on its exports.
