US Trade

One success of G-20 in the face of the 2008-09 global economic
meltdown was to obtain agreement from players to keep the trade
windows open. The recovery in US and in global trade has been
outstanding. However, old issues that plagued the trade front over
most of the past decade have resurfaced.

China continues to run an agressive mercantilist policy. Even
when it locates a business outside of China, such as in Iraq or in
Africa, the facilities are primarily staffed by Chinese. Since
employment looks to be a substantial political issue within the US
in the coming years, so it is logical to expect that the issue of
China's large export subsidies will be revived within US political
circles as well as pressure from the US for China to open its
markets further. EU trade also took a heavy beating from China
in 2009. So, I would expect a more contentious period ahead
between the US and China and also within the EU, where
German exports are undermining domestic recoveries in
troubled European states. I can understand tolerance of
mercantilist economic policies when a country is just emerging
as an industrial player, but The US has put up with China's
damaging policies far too long. It will be interesting to see how
much mercantile trade issues heat up in 2011 and whether the
US congress readies itself to be more forceful with China.
Since Geithner has been a patsy on this issue, it may fall to the
senate to do the heavy lifting.