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April 26, 2004

Who needs who ?

For the times they are a-changin -

Seemingly unrelated, the two events are in fact key indicators of a power shift in the subtle game of global trade. By all appearances, US trade negotiators have lost their footing. Fretting over a record trade deficit of US$542 billion, they call for Asian governments to remove trade barriers. At the same time, Congress introduces protectionist policies at home. Treasury Secretary John Snow presses Beijing's leaders to revalue the yuan. Yet the Bush administration relies on China and Asia to finance its budget deficit by snatching up US Treasury bills, mass investments that keep interest rates soothingly low. In sum, the US needs Asia more than ever before, but its leverage is diminishing and its policies are all over the map.

April 26, 2004 in Current Affairs | Permalink


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