[EDITORIALS]U.S., China trade dispute effectsThere are signs of serious trade disputes between the United States and China. The United States recorded its highest-ever monthly trade deficit of $61 billion in February. The trade deficit with China reached $13.9 billion. Since the 30-year global textile quotas expired at the beginning of this year, Chinese textiles exports to the United States surged 62.4 percent in the first two months of this year compared with the same period of last year.
The United States is pressing China in two ways. Firstly, it is requesting China to let its currency, the yuan, appreciate. The U.S. Senate is preparing a bill to allow the United States to slap a 27.5 percent retaliatory tariff on Chinese imports if the country fails to revalue its currency. The U.S. National Association of Manufacturers say the yuan is undervalued by 40 percent.
Secondly, the United States is pressing China on piracy. William Lash, an assistant U.S. secretary of commerce, told China’s commerce minister that China’s counterfeiting causes up to $24 billion in annual losses for the United States. He ripped up a fake bag he had bought in China with his hands during a press conference.
We are concerned about how Korea will be affected by disputes between the United States and China. The increase of the U.S. trade deficit causes a depreciation of the U.S. dollar. If the Chinese yuan appreciates, the Korean won will strengthen. It will be a great burden on Korea’s export-dependant economy. Trade disputes with the United States will have the biggest outside impact on the Chinese economy since it was opened. If it puts brakes on China’s economic growth, Korea will have difficulty. Our economy was seriously battered when China tightened its fiscal policy last year.
This is a situation in which we could lose high demand from China for goods, which our country has depended on over the last three years. The government should no longer repeat the rosy view of the domestic economy solely based on department store sales and credit card purchases. The uncertainties in the world economy are increasing. The government should hurry to set up an emergency plan for the worst-case scenario of the so-called “three highs” ― high oil prices, a high unemployment rate and a high won value against the dollar.
As trade disputes between the United States and China are getting more serious, we do not have much more time.