Other Asia governments, most recently Japan, have adopted similar currency strategies to boost exports. For example, the jump in the value of the dollar against the yen gives Toyota (TM) at least a $2,000 advantage pricing of the Camry against the Ford (F) Fusion. That may not show up in the list price but it gives Toyota's importing arm in the United States the latitude to pack cars with better features and more aggressively discount.
Economists across the ideological and political spectrum have offered strategies to combat predatory currency policy and force China and others to abandon mercantilism. However, China, Japan and others, offering only token gestures and deflecting rhetoric, exploit President Obama's weakness on economic issues -- the Obama policy of appeasement handicaps the U.S. recovery.
Cutting the annual trade deficit by $300 billion, through domestic energy development and conservation, and forcing China and others' hands on protectionism would increase GDP by about $500 billion a year and create about 5 million jobs.
Cutting the trade deficit in half would raise long-term U.S. economic growth by one to two percentage points a year. But for the trade deficits of the Bush and Obama years, U.S. GDP would be 10% to 20% greater than today, and unemployment and budget deficits not much of a problem.At the time of publication the author had no position in any of the stocks mentioned. Follow @PMorici1 This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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