Tough trade talk on China could do more harm than good

Visit msnbc.com for breaking news, world news, and news about the economy Supporters of the bill argue it would save U.S. jobs against unfair trade competition. Critics say trade sanctions won’t do much to help American workers or consumers. “It’s a double-edged sword,” James Thompson, the American-born chairman of Crown Worldwide Holdings, a global shipping company based in Hong Kong, told a group of American reporters on a recent trip to China. “It will shift jobs to Mexico and Brazil – not the U.S. And from the (American) consumers’ perspective, it will put higher prices on the products they buy in the U.S.” A rising yuan could put pressure on companies making products in China to look for places to make those goods more cheaply. But if low-cost manufacturing is your objective, there are a lot of other low-wage countries to consider before setting up shop in the U.S. Low-cost Chinese goods have also been a boon to American consumers and helped to contain inflation in the U.S. That trend could reverse if China lets the yuan's value rise more quickly. Supporters of a “get tough” trade policy are also hoping that a higher-valued yuan would make U.S. exports more competitive relative to Chinese companies. But U.S. manufacturers would still have to compete with other highly developed countries like Germany and Japan. The prices of those goods wouldn’t be affected by a free-floating yuan.