Thursday, 30 September 2010


Protectionistic policies from the US is nothing new, there has long been a conflict with the European Union regarding tariffs for imported goods. In a similar way the US tariffs has resulted in similar tariffs in the EU. The chinese government has long been criticised for keep the exchange rates for the yuan artificially low. The reason for this policies is obviously to protect the domestic industry. The problem with this is that it helps industries that otherwise have lost their competitive advantage, and would need to develop. Protectionism may help in the short term, but for long term gains free trade would is preferable.

Isn't it ironic?
The US house of representatives is criticising the chinese protectionistic policies regarding the yuan by adopting extra fees for chinese products.

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