Given President Bush’s refusal so far to lift his illegal tariffs on steel imports, European retaliation is almost inevitable. But a potentially even graver battle is brewing between the US and its fourth largest trading partner, China. Last year America ran a $103 billion-dollar deficit with China, something US unions blame on ‘unfair’ trade practices. Last month US commerce secretary Don Evans warned the Chinese that they faced retaliation, saying, ‘China’s current trade practices are exploiting our open markets and are creating an unfair advantage that is undercutting American workers.’
What is jolly unfair, of course, is that China has far lower labour costs than America and so is able to flood the market with cheap goods, much to the appreciation of American consumers. That America should suddenly be enjoying such a rush of cheap goodies from the Far East is largely down to China’s accession to the World Trade Organisation in December 2001.
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