Are we headed toward a global trade war? Maybe so, judging from the rhetoric that is being thrown around by some big names. The issue is whether the United States should try to remedy its trade deficit by forcing China to make its currency—and hence its exports—more expensive.
Paul Krugman, the U.S. economist and Nobel winner, is one of those talking tough. “It’s time to take a stand” against China’s currency peg with the U.S. dollar, he says. He’s urging Congress to name China as a currency manipulator and threaten it with tariffs of 25% on any Chinese goods entering the United States.
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