Archive for the ‘trade’ Category

Trade Barriers Could Threaten Global Economy

March 18, 2009

At least 17 of the 20 major nations that vowed at a November summit to avoid protectionist steps that could spark a global trade war have violated that promise, with countries from Russia to the United States to China enacting measures aimed at limiting the flow of imported goods, according to a World Bank report unveiled yesterday. 

By Anthony Faiola
Washington Post Staff Writer

The report underscores a “worrying” trend toward protectionism as countries rush to shield their ailing domestic industries during the global economic crisis. It comes one day after Mexico vowed to slap new restrictions on 90 U.S. products. That action is being taken in retaliation against Washington for canceling a program that allowed Mexican truck drivers the right to transport goods across the United States, illustrating the tit-for-tat responses that experts fear could grow in coming months.

The report comes ahead of an April 2 summit in London in which the heads of state from those 20 industrialized and developing economies will seek to shape a coordinated response to the economic crisis. Their inability to keep their November promises is another indication of how difficult it will be to implement any agreement reached next month on a global scale.

Read the rest:
http://www.washingtonpost.com/wp-dy
n/content/article/2009/03/17/AR200
9031703218.html?hpid=topnews

Obama: Mexico Tests His Free Trade Talk

March 17, 2009

A long-simmering trade dispute boiled over into sanctions on Monday after Mexico said it would raise tariffs on $2.4bn of US exports in retaliation for ending a pilot programme to allow Mexican trucks on American roads.

By Alan Beattie in Washington
and Adam Thomson in Mexico City
Financial Times
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The announcement marks one of the first big tests for trade policy under President Barack Obama, who has sought to tread a fine line between assuaging his domestic constituencies and upholding the US’s international obligations.

Mexico said it would increase tariffs on 90 industrial and agricultural goods, likely to include politically sensitive farm products, after Congress last week killed a pilot programme allowing a limited number of Mexican trucks on American highways. Mexico obtained a judicial ruling in 2001 under the North American Free Trade Agreement (Nafta) allowing it to impose such sanctions, but has held off since the US introduced the pilot scheme.

The sanctions, which Mexican officials say are set to be imposed later this week, will be one of the largest acts of retaliation against US exports. US goods exports to Mexico totalled $151.5bn last year. On Monday, Gerardo Ruíz Mateos, Mexico’s economy minister, said: “We believe that the action taken by the US is wrong, protectionist and in clear violation of Nafta.”

Read the rest:
http://www.ft.com/cms/s/0/ce24
31c4-126b-11de-b816-0000779fd2ac.html

Obama’s Wimpy Response:
http://petemurphy.wordpress.com/200
9/03/17/wimpy-response-by-obama-to
-mexican-trade-challenge/

Obama Can’t Ignore Mexico, Latin America:

 Socialist Former CNN Reporter Wins Election in El Salvador; “Yes We Could”
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Pressuring Obama: International Actors Take Risks Amid Uncertainty

Obama: Troop move to Mexican border under consideration

World Bank: Global Trade Drops Most in 80 Years; What’s it Mean For Obama?

March 9, 2009

In a paper prepared for this month’s meeting of the G20 in London, the World Bank says global trade is on track to this year record its largest decline in 80 years.

The bank also says that suffering in places like the U.S. and Europe may be significant but the global economy’s impact in poorer countries is much more dramitic.

“Debt issuance by high-income countries is set to increase dramatically, crowding out many developing-country borrowers, both private and public,” it says.

World Bank president Robert Zoellick warned that preventing an economic catastrophe in developing countries was important for global efforts to overcome the crisis.

“We need investments in safety nets, infrastructure, and small and medium size companies to create jobs and to avoid social and political unrest.”

What’s this mean for President Obama: should he help “bailout” poor countries, as the New York Times proposes?  Or should he get money flowing again so Americans can buy goodies at WalMart from China, boosting world trade?  Either way, the solutions take a lot of debt, much borrowed from China, with may cut into his health care plans and ideas about the environment, global warming, energy, education and other projects….

Related:
 NYT Urges Obama To “Bail Out” Third World Too

 Despite Global Economy Downturn, China Still Lending

 World Bank Says Global Economy Will Shrink in ’09

 Obama has little reason to fall in with the G20

India, China jostle for influence in Indian Ocean

March 8, 2009

This battered harbor town on Sri Lanka’s southern tip, with its scrawny men selling even scrawnier fish, seems an unlikely focus for an emerging international competition over energy supply routes that fuel much of the global economy.

An impoverished place still recovering from the devastation of the 2004 Indian Ocean tsunami, Hambantota has a desolate air, a sense of nowhereness, punctuated by the realization that looking south over the expanse of ocean, the next landfall is Antarctica.

But just over the horizon runs one of the world’s great trade arteries, the shipping lanes where thousands of vessels carry oil from the Middle East and raw materials to Asia, returning with television sets, toys and sneakers for European consumers.

By Gavin Rabinowitz
Associated Press
June 2008

These tankers provide 80 percent of China’s oil and 65 percent of India’s — fuel desperately needed for the two countries’ rapidly growing economies. Japan, too, is almost totally dependent on energy supplies shipped through the Indian Ocean.

Any disruption — from terrorism, piracy, natural disaster or war — could have devastating effects on these countries and, in an increasingly interdependent world, send ripples across the globe. When an unidentified ship attacked a Japanese oil tanker traveling through the Indian Ocean from South Korea to Saudi Arabia in April, the news sent oil prices to record highs.

Emerging giants
For decades the world relied on the powerful U.S. Navy to protect this vital sea lane. But as India and China gain economic heft, they are moving to expand their control of the waterway, sparking a new — and potentially dangerous — rivalry between Asia’s emerging giants.

China has given massive aid to Indian Ocean nations, signing friendship pacts, building ports in Pakistan and Bangladesh as well as Sri Lanka, and reportedly setting up a listening post on one of Myanmar’s islands near the strategic Strait of Malacca.

Now, India is trying to parry China’s moves. It beat out China for a port project in Myanmar. And, flush with cash from its expanding economy, India is beefing up its military, with the expansion seemingly aimed at China. Washington and, to a lesser extent, Tokyo are encouraging India’s role as a counterweight to growing Chinese power.

INDIA OCEAN INTRIGUE
ESRI / AP
Map locates the major Indian Ocean oil trade routes and newly developed ports built by China.

Among China’s latest moves is the billion dollar port its engineers are building in Sri Lanka, an island country just off India’s southern coast.

The Chinese insist the Hambantota port is a purely commercial move, and by all appearances, it is. But some in India see ominous designs behind the project, while others in countries surrounding India like the idea. A 2004 Pentagon report called Beijing’s effort to expand its presence in the region China’s “string of pearls.”

No one wants war, and relations between the two nations are now at their closest since a brief 1962 border war in which China quickly routed Indian forces. Last year, trade between India and China grew to $37 billion and their two armies conducted their first-ever joint military exercise.

Still, the Indians worry about China’s growing influence.

“Each pearl in the string is a link in a chain of the Chinese maritime presence,” India’s navy chief, Adm. Sureesh Mehta, said in a speech in January, expressing concern that naval forces operating out of ports established by the Chinese could “take control over the world energy jugular.”

“It is a pincer movement,” said Rahul Bedi, a South Asia analyst with London-based Jane’s Defense Weekly. “That, together with the slap India got in 1962, keeps them awake at night.”

B. Raman, a hawkish, retired Indian intelligence official, expressed the fears of some Indians over the Chinese-built ports, saying he believes they’ll be used as naval bases to control the area.

“We cannot take them at face value. We cannot assume their intentions are benign,” said Raman.

But Zhao Gancheng, a South Asia expert at the Chinese government-backed Shanghai Institute for International Studies, says ports like Hambantota are strictly commercial ventures. And Sri Lanka says the new port will be a windfall for its impoverished southern region.
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With Sri Lanka’s proximity to the shipping lane already making it a hub for transshipping containers between Europe and Asia, the new port will boost the country’s annual cargo handling capacity from 6 million containers to some 23 million, said Priyath Wickrama, deputy director of the Sri Lankan Ports Authority.

Wickrama said a new facility was needed since the main port in the capital Colombo has no room to expand and Trincomalee port in the Northeast is caught in the middle of Sri Lanka’s civil war. Hambantota also will have factories onsite producing cement and fertilizer for export, he said.

Gearing military expansion towards ChinaMeanwhile, India is clearly gearing its military expansion toward China rather than its longtime foe, and India has set up listening stations in Mozambique and Madagascar, in part to monitor Chinese movements, Bedi noted. It also has an air base in Kazakhstan and a space monitoring post in Mongolia — both China’s neighbors.

 

India has announced plans to have a fleet of aircraft carriers and nuclear submarines at sea in the next decade and recently tested nuclear-capable missiles that put China’s major cities well in range. It is also reopening air force bases near the Chinese border.

Encouraging India’s role as a counter to China, the U.S. has stepped up exercises with the Indian navy and last year sold it an American warship for the first time, the 17,000-ton amphibious transport dock USS Trenton. American defense contractors — shut out from the lucrative Indian market during the long Cold War — have been offering India’s military everything from advanced fighter jets to anti-ship missiles.

“It is in our interest to develop this relationship,” U.S. Defense Secretary Robert Gates said during a visit to New Delhi in February. “Just as it is in the Indians’ interest.”

Officially, China says it’s not worried about India’s military buildup or its closer ties with the U.S. However, foreign analysts believe China is deeply concerned by the possibility of a U.S.-Indian military alliance.

Ian Storey of the Institute of Southeast Asian Studies in Singapore said China sent strong diplomatic messages expressing opposition to a massive naval exercise India held last year with the U.S., Japan, Singapore and Australia. And Bedi, the Jane’s analyst, added “those exercises rattled the Chinese.”

Growing military budgetsIndia’s 2007 defense budget was about $21.7 billion, up 7.8 percent from 2006. China said its 2008 military budget would jump 17.6 percent to some $59 billion, following a similar increase last year. The U.S. estimates China’s actual defense spending may be much higher.

 

Like India, China is focusing heavily on its navy, building an increasingly sophisticated submarine fleet that could eventually be one of the world’s largest.

While analysts believe China’s military buildup is mostly focused on preventing U.S. intervention in any conflict with Taiwan, India is still likely to persist in efforts to catch up as China expands its influence in what is essentially India’s backyard. Meanwhile, Sri Lankans — who have looked warily for centuries at vast India to the north — welcome the Chinese investment in their country.

“Our lives are going to change,” said 62-year-old Jayasena Senanayake, who has seen business grow at his roadside food stall since construction began on the nearby port. “What China is doing for us is very good.”

Obama has little reason to fall in with the G20

March 8, 2009

“REDUCED cost of government, adequate government income, and ability to service government debts are all so important to ultimate stability . . . The United States seeks the kind of dollar which a generation hence will have the same purchasing and debt-paying power . . . Our broad purpose is the permanent stabilisation of every nation’s currency.”

By Irwin Stelzer
The Times (UK)

So wired Franklin D Roosevelt to the representatives of the 66 nations attending the London Economic Conference on July 3, 1933. Sailing on his yacht at the time, the president decided to torpedo prime minister Ramsay MacDonald’s plan for international action to deal with war debts and currency stabilisation.

Gordon Brown is less concerned about maintaining the value of his currency than that old dissimulator FDR professed to be. He needs a successful, or at least big and glitzy international conference for other reasons, not least for the political uplift that a sprinkle of Obama stardust might provide. But enough cynicism. Equally important is the prime minister’s belief in the need for international co-ordination and a strong stand against protectionism.

So he is relieved to have avoided MacDonald’s fate: the American president will attend the April 2 London conference of the G20 nations.

The important question is whether the conference can achieve its goal of a co-ordinated response to the world recession. There are reasons to doubt it.

The first is that Brown’s plea to a joint session of Congress to avoid “a protectionism that . . . in the end protects no one” fell on deaf ears. The White House and the Congress have assured their trade-union funders that Doha is dead, and there will be no more trade-opening measures. Indeed, existing agreements are to be tightened. Washington has more in common with French president Nicolas Sarkozy than with Brown when it comes to trade.

The second obstacle to close co-operation was made clear by the president in a press conference with the prime minister. Brown talked of grand bargains, a global new deal. Obama spoke vaguely of better co-ordination of financial regulation, and expressed no enthusiasm for co-ordinating American recovery efforts with those of the EU, except to call on Britain and Europe to do more. The president faces a bailout-weary Congress, and one that wants any additional borrow-and-spend directed at the plight of America’s homeowners. Indeed, even when it comes to regulation, the White House and key congressional figures let it be known that America has no intention of ceding any of its powers to an international body.

Perhaps the only area of solid agreement was a distaste for “tax havens” — those places to which over-taxed individuals and companies can legally flee. Nothing appeals to the leaders of nations such as high-tax Britain and soon-to-be-high-tax America as the possibility of a cartel that can impose its policies by disciplining “cheaters”.

The third obstacle in the path of a Brown triumph at the conference is money. The prime minister wants a larger role to be assigned to international institutions such as the International Monetary Fund (IMF) and the World Bank. But that would mean a larger contribution from cash-strapped Obama, which is not on the cards, especially since America is already under-represented at the IMF and the administration is taken with the scathing criticism of the IMF from economists it respects, such as Nobel laureate Joseph Stiglitz.

Fourth, Obama has no sentimental attachment to Britain or to Europe. He has a broadly leftist ideology, but other than that he is a “whatever works” sort of guy, to borrow from Tony Blair. Which is why his primary attention is on Asia, where Japan and China must continue to purchase Treasury IOUs if the Obama domestic programme is to be financed.

It is no surprise that Japan’s prime minister Taro Aso beat Brown for the prize of first foreign leader to be granted access to the Obama Oval Office. Or that Hillary Clinton slid over the little matter of China’s human-rights violations when she visited the regime’s leaders.

Finally, Obama knows that his presidency is doomed if there is another attack on the homeland that George Bush kept safe for seven years. That is why he has felt it necessary to make the war in Afghanistan, home of plotters aiming to do harm to America, Obama’s War. So he wants more troops from his European allies. And troops that will fight, not merely “reconstruct”, or patrol peaceful areas, or remain in barracks at night. But the Europeans are having none of it, which Obama — who already knows this — will have officially confirmed to him at the Nato meetings to which he will fly after the G20 session.

Read the rest:
http://business.timesonline.co.uk/tol/busine
ss/columnists/article5864579.ece

Stimulus: “Buy American” Retained; Sure To Anger International Partners

February 14, 2009

Congress approved protectionist measures in a $789 billion stimulus bill Friday that U.S. trading partners have warned could spark a trade war.

Associated Press

The bill, however, left the Obama administration some room to maneuver to appease other countries who say it will benefit U.S. companies unfairly.

The stimulus bill was approved by the House Friday afternoon and by the Senate later in the evening. It now goes to President Barack Obama who is expected to sign into law quickly.

Major partners, including the European Union and Canada, say the legislation favoring U.S. steel, iron and manufactured goods for government projects could undermine pledges by the leaders of major economies not to resort to perfectionism during the world economic downturn.

Requirements known as “Buy American” were softened as the bill progressed through Congress and after strong criticism from abroad. Senate and House negotiators agreed to a version that would require the government not to violate trade agreements when implementing the law.

The bill also allows the Obama administration and state governments to waive requirements to favor U.S. companies if they deem it in the U.S. public interest and if they publish a justification.

The dispute has put Obama in a difficult position. While campaigning last year, he raised questions whether U.S. trade agreements contained sufficient protection for labor and environmental standards. He has warned recently, however, about antagonizing trading partners and has made clear that passage of the overall stimulus bill is needed urgently to mend the U.S. economy.

In several television interviews last week, he said the stimulus package should not include protectionist language that could trigger a trade war. But now that it does, he is likely to sign it anyway. The measures appear, however, to give the administration discretion about how to implement spending decisions, given the requirement of meeting trade obligations.

Read the rest:
http://www.foxnews.com/politics/elections/2009/
02/13/congress-approves-protectionist-measure-
spark-trade-war/

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President Obama visited the Caterpillar factory in East Peoria, Illinois this last week.

Caterpillar says it pays $100,000 in tariffs on each piece of heavy equipment it exports to Columbia, because the U.S. Congresss has failed to pass the free trade agreement….

Now with this “buy American” provision in the stimulus it is likely the U.S. will find trouble with other trading partners…

Related:
 Pastor Obama Continues With Holy Stimulus, But The Congregation Isn’t Buying

Why Europe No Longer In Obama Camp Over Stimulus
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China’s leader Hu Jintao cautioned President Obama about the “buy American” provision in the economic stimulus plan during a phone conversation.

Related:
CNN:
http://edition.cnn.com/2009/POLITIC
S/02/05/senate.buy.american/index.html

 “Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

 Dallas Federal Reserve Chief, China, Germany All Call Protectionism “Death”

China announced that President Hu Jintao, seen here in 2008, ...
President Hu Jintao of China (AFP/File/Louisa Gouliamaki)

Made in china.jpg

Why Europe No Longer In Obama Camp Over Stimulus

February 5, 2009

Europe’s euphoria over Barack Obama is fading fast. As Congress wrangles over the President’s $819 billion stimulus package, a “buy American” clause has the European Union threatening legal action and retaliatory sanctions and opening up the prospect of an explosive trade war.

Just weeks after hailing Obama’s election, E.U. officials are now howling that his plans are putting a global economic recovery at risk. They want Obama to resist any retreat into protectionism, warning that it could turn the recession into a 1930s-style slump.

The “buy American” clause in the President’s economic stimulus package states that only U.S. iron, steel and manufactured goods can be used in construction projects funded by the bill. The package has already been approved by the House of Representatives, and the Senate is currently debating an $888 billion version of the bill.

Time Magazine

The provisions might protect U.S. jobs in the short term, but the E.U. says they would hobble global trade, a key motor for the world economy. John Bruton, the E.U. ambassador in Washington, has described the measures as “setting a dangerous precedent, and “neither the right or effective response to the situation.” German Chancellor Angela Merkel has said that “past world economic crises showed protectionism would be the completely wrong answer.”

Similar measures to “buy American” have been adopted or considered in Argentina, China, Indonesia, Ecuador, India, Russia and Vietnam. Pascal Lamy, director-general of the World Trade Organization, warned on Feb. 2 that any go-it-alone route would foster a spiral of retaliation. “Today we run the risk of sliding down a slippery slope of tit-for-tat measures. It was Mahatma Gandhi who said ‘An eye for an eye makes the whole world blind,’ ” Lamy said.

The E.U.’s alarm is partly a reflection of its own precarious situation in the face of a widespread backlash against globalization. The commission is now scrutinizing the E.U.’s own stimulus schemes for potential discrimination against foreigners. In focus are plans such as France‘s $10 billion move to bail out its car industry by requiring firms to source car parts from local suppliers.

“In this climate, many people resent seeing billions of tax dollars leak outside the country. But if this ‘buy American’ clause is adopted, it will make it harder for those in Europe in arguing for markets to stay open,” says Simon Tilford, chief economist at the London-based Centre for European Reform (CER) think tank. “Also, after Europe’s huge expectations for Obama, there is bound to be a huge disillusion with him if the U.S. goes down this road.”

“Buy American” is highly popular among Congressional Democrats and trade unions. Obama supported it during his White House campaign, even distributing campaign buttons and flyers with a special emblem.

But the move is opposed by most Republicans, and Senate minority leader Mitch McConnell has demanded that it be stripped from the bill. Major U.S. companies like General Electric and Caterpillar have also opposed the provision, saying it will hurt their ability to win contracts abroad – and impose layers of bureaucracy on what is already likely to be a cumbersome contracting process.

Read the rest:
http://news.yahoo.com/s/time/08
599187716200

Related:
Senate Votes “Softened” “Buy American” Section in Stimulus

“Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

“Buy American” Sounds Good; Carries An Unbearable Down Side

February 4, 2009

American tax dollars directed at America’s ailing economy should be spent only on American products. That sounds logical – and compassionate to US workers, who can use all the lovin’ they can get. But the “Buy American” provision of the megastimulus package winding through Congress makes little sense. Neither is it kind.

Christian Science Monitor, Editorial

Last week, the House passed an $819 billion economic recovery plan with the stipulation that all public projects funded by the bill (read highways, airports, mass transit, etc.) use only iron and steel produced in the U.S. of A. The Senate version goes further, to include all manufactured products.

The lawmakers’ thinking on this is understandable. They’re sensitive to the outrage that would come when it’s discovered that some federal monies will inevitably go to foreign goods, supporting foreign jobs. With an economy this bad, better take care of our own, they reason.

Related:
 Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

But the gain in US jobs will not be worth the ultimate cost.

For starters, the number of jobs generated by the House version will be tiny – about 1,000 steel jobs, according to a study this week by the Peterson Institute for International Economics. If the Senate’s broader version is adopted, about 9,000 US manufacturing jobs would be gained, according to the institute.

Now look at the loss side of the ledger. A “Buy American” provision is sure to generate retaliation abroad (threats loom already). If trading partners strike back on steel, the US industry could lose exports equal to or greater than the number generated by the stimulus.

If other countries choose to shut out only a small percent of American manufactured goods from their own government-funded projects, the US would lose 6,500 jobs. More extreme measures could cost 65,000 jobs.

Meanwhile, cutting foreign products from the stimulus bill means less price competition, more expensive public-works projects, and thus fewer of them to go around.

Further, the Buy American provisions violate US trade obligations (though one wonders whether auto bailouts and other rescue measures around the world will end up being legally challenged).

Read the rest:
http://www.csmonitor.com/2009/
0204/p08s01-comv.html

Economy Sparking Protectionism, Global Trade Disputes?

February 1, 2009

The world may be on the brink of a gentler kind of trade war.

By Anthony Faiola
The Washington Post

In 1930, Congress fired the first shot in a protectionist battle that prolonged and deepened the Great Depression. After passing a bill aimed at saving American jobs by effectively barring 20,000 imported goods, including French dresses and Argentine butter, other nations retaliated by raising their own barriers on U.S. products, effectively bringing global commerce to a halt.

In the aftermath, organizations like the World Trade Organization sought to ensure that never happened again. Nations agreed to put on economic straitjackets permitting them to raise tariffs within hard-fought limits. That is likely to help prevent a repeat of the devastating and overt trade wars seen during the Great Depression, since it is now far harder for nations to increase tariffs on a wide array of imports at once.
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But there remains a surprising amount of wiggle room in international trade and commerce treaties, and that, analysts say, is where the battle is now being fought as leaders worldwide face intense pressure at home to protect domestic jobs in the deepening financial crisis. They are engaging in a more subtle form of protectionism that often skirts those rules.

This weekend at the World Economic Forum in Davos, Switzerland, the annual event drawing the world’s leaders, luminaries of industry, commerce and philanthropy, a host of dignitaries raised a crescendo of alarm over growing economic nationalism. “We will resolutely fight protectionism,” Japanese Prime Minister Taro Aso told reporters there, giving voice to the general sentiment.

Yet even as leaders call for nations to do the right thing on the international stage, actually doing it at home is proving far tougher.

British Prime Minister Gordon Brown, for instance, delivered a particularly impassioned plea for nations to remain on the path of free trade yesterday. “This is not like the 1930s. The world can come together,” he said. However, back in Britain, the government is directing British banks with global operations now being rescued with taxpayers’ dollars to boost lending to British businesses and citizens first.

Read the rest:
http://www.washingtonpost.com/wp-dyn
/content/article/2009/01/31/AR20090
13101895.html?hpid=topnews

Related:
Obama Forced to Rethink “Buy American” in Stimulus After Hits from China, Germany, Others

Global Economy Sparks Protests; Governments Fear Greater “Social Unrest”

China Starts to Set Limits On Its Biggest Borrower: Barack Obama and The U.S.

January 30, 2009

China is starting to dictate rules to President Obama and the the United States.  We’ve written here before that China owns America and will probably own more soon.  Just as President Obama decided it was appropriate to criticize Wall Street bonuses (after all, those banks are getting bailout money) China is now saying they need the U.S. to follow some rules in order to keep our debt financing afloat…You take a guy’s money and he owns you or he breaks your legs…

Related:
Economic Stimulus About “Soul of America”

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By TOM RAUM, Associated Press Writer

China recently surpassed Japan as the U.S. government’s largest creditor. Any decision by Beijing to move its money would deal a dizzying new blow to an already tottering American economy. Yet relations between China and the new Obama administration are off to a rocky start.

For now, Beijing continues to loan Washington money by buying Treasurys and other U.S. government securities, helping to finance the ever-growing U.S. budget deficit. But there are signs its leaders may be considering trimming these holdings as that country experiences its own economic slowdown. Strains between the two economic powerhouses seem to be growing with the change in administrations.

The latest irritants are a “buy American” provision attached to White House-backed stimulus legislation moving through Congress and criticism of China’s currency policies by Vice President Joe Biden and Treasury Secretary Timothy Geithner.

Geithner accused Beijing of “manipulating” its currency during his Senate confirmation process.

An outside view of the New York Stock Exchange on Wall street. ...

Biden, interviewed Thursday by CNBC, said that the Obama administration would “say to China — which occasionally the last administration was reluctant to do — ‘You’re a major player on the world scene economically, and you’ve got to play by the rules that everybody else plays by.'”

Their comments followed a move by Chinese censors to silence part of a live broadcast of Obama’s inaugural address when he spoke of the U.S. struggle against communism.

And at an economic forum in Switzerland on Wednesday, Chinese Premier Wen Jiabao blamed China’s economic woes on U.S.-led Western financial institutions, suggesting “a lack of self-discipline” and “blind pursuit of profit.”

The pointed words from Geithner and Biden were widely seen as an escalation of old complaints that China artificially depresses the value of its currency to bolster its exports, even though the White House has sought to play down such comments and has denied increasing friction with China.

China has allowed the value of its currency to rise by 21 percent over the past two years. But American manufacturers complain the Chinese yuan is still significantly undervalued, making Chinese goods cheaper for U.S. consumers and American products more expensive in China.

Related:
China May Have Mafia View of Obama Stimulus: “Someday We Break Your Legs”

Read the rest:
http://news.yahoo.com/s/ap/20090130/a
p_on_go_pr_wh/us_china_strains_analysis_2

Related:
 Russia Wants Something From Obama: Carrot and Stick Diplomacy

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Obama Slams Wall Street For Bonuses

WASHINGTON (AFP) – President Barack Obama furiously slammed Wall Street titans who raked in billions in bonuses while taxpayers bailed out their industry as “shameful” and guilty of acute “irresponsibility.”

Obama, anger flashing across his usually calm countenance, said bosses of big finance firms must sacrifice along with other Americans, as the country tries to dig itself out of a deep economic hole.

The president’s ire was sparked when he read a newspaper article detailing the 18.4 billion dollars in bonuses collected by Wall Street firms last year, even as stock markets plunged and the economy slumped towards a recession.

“That is the height of irresponsibility. It is shameful, and part of what we are going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility,” Obama told reporters in the Oval Office.

Read the rest:
http://news.yahoo.com/s/afp/20090130/bs_afp/
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