It is clear that the G-7 will come in with further intervention. They have made a commitment now and they must follow through. |
It's a big mistake not to label China if the U.S. law has any meaning. They are still intervening massively to keep their currency from rising. I don't see how you can not define that as manipulation. |
The failure of China to permit its currency to move, as most other countries in the world are doing, leads to a major protectionist trade reaction here in the United States. |
The failure to get progress on the economic issues may undermine the overall relationship and then make it harder to work together on the security concerns. |
The point is -- ad we know this from history -- that if currencies remain way out of line, trade protectionism follows. |
Traditionally, when the European integration process gets hit by a blow like this, they regroup and usually use it as a spur for progress. |
We get the strong sense that the degree of frustration with China is accelerating very sharply and is not likely to be assuaged by a few orders that likely would have been placed anyway. |