However, the Democratic takeover of both houses of Congress could further increase pressure on the Bush administration to go head to head with China on issues related to the lopsided trade deficit.
The incoming freshman class includes a number of Democrats from states that have seen significant job losses in manufacturing. They might be inclined to deal more harshly with China than their free trade-minded Republican predecessors.
Leading up to the election, politicians on both sides of the aisle were already clamoring for China to revalue its yuan upward, which would make Chinese goods more expensive and in theory help reduce its trade surplus with the U.S.
Earlier this fall, Sen. Charles Schumer, a New York Democrat, and Republican Sen. Lindsey Graham of South Carolina threatened to bring to a vote legislation that would impose a hefty tariff on Chinese exports to the U.S. unless Beijing revalued its currency.Gutierrez sought to distance himself from protectionist sentiments during his comments. "We believe the way to narrow the trade deficit is by increasing our exports, not by limiting China's exports to the U.S.," he said. In the meantime, U.S. companies continue to grapple with the piracy problem that robs them of considerable revenue in China. Illegally copied DVDs are one of the most common signs of China's counterfeit culture.