China makes way, way too much steel. In 2015, it produced nearly 500 million tons more than it needed. Production of that steel was subsidized by the Chinese government in ways that violate international trade rules, so the price was artificially low. And China suppresses the value of its currency, further falsely reducing the cost of the steel.
As Donald Trump continues his Shermanesque march through the Republican primaries, the Wall Street Journal continues to fire relentless volleys of cheap shots, pot shots, and the paper's much hoped for gut shot. Just consider last week's run-up to what would be Trump's resounding South Carolina victory.
Division and diversion help the one percent capture government, securing policies that further enrich the rich, like trickle-down economics under which no benefits ever actually descend, bailouts for Wall Street but not Main Street and job-destroying trade deals like NAFTA and the proposed Trans-Pacific Partnership.
Currency manipulation has become our trade competitors' favorite maneuver for skirting massive trade deals as soon as they sign them, and it's about to happen again. The result of currency manipulation, as it occurs after trade agreements, is that it's nearly impossible for the U.S. to get a fair shake in these deals.
What are President Obama's goals in the international trade area when President Xi visits the United States next week? I worry that there is not one among them that will change the U.S. trade picture. And unfortunately, when we look at the trade relationship with China, there is much that needs to be changed.