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China Trade Surplus Surges

Members of Congress who are trying to force the Obama Administration to label China as a “currency manipulator”  now have another weapon. The China Customers Bureau reported that the People’s Republic’s trade surplus for June was $20 billion. “China has…

By Douglas A. McIntyre
Published July 10, 2010, 7:42am ET · 2 min read

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Members of Congress who are trying to force the Obama Administration to label China as a “currency manipulator”  now have another weapon. The China Customers Bureau reported that the People’s Republic’s trade surplus for June was $20 billion.

“China has reported another strong trade surplus, and next week we are going to see another large U.S. trade deficit. This contrast will likely add to the international pressure on Beijing to allow further currency gains to make a bigger contribution to global growth,” said Royal Bank of Canada economist Brian Jackson, according to The Wall Street Journal.

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Many economists and members of Congress believe that China was being disingenuous when it said that it would stop the policy of pegging the yuan to the dollar. That should have begun to devalue China’s currency which would make US exports more competitive in world markets. The value of the yuan has been blamed for a loss of American jobs, particularly in the manufacturing sector. With unemployment in the US hovering just below 10% and the manufacturing sector in a shambles, Congress is likely to try to seize the power of the Treasury Department to decide whether China’s currency in being manipulated. That, in turn, could cause the US to put high tariffs on Chinese imports. China would likely retaliate and a trade war would ensue. Import and Export of China charts from China Customers Bureau

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A trade war between the two giants could disrupt global trade enough to make the financial contagion issues in Europe seem like a relatively small problem. Costs of goods imported into the US would likely soar greatly pressuring consumer spending

Also, China said it would not employee the “nuclear option” of dumping US Treasuries which would make America’s borrowing costs soar. But that could change quickly

Douglas A. McIntyre

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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