A better way the US can fight trade war with China

Stemming the flow of cheap money is key, but Trump is doing the opposite

Anne Stevenson-Yang
Shopping at a Target store in Manhattan. A decade of near-zero interest rate policy has led to a steady flow of US dollars into China, fuelling the manufacturing of cheap export goods, the writer says.
Shopping at a Target store in Manhattan. A decade of near-zero interest rate policy has led to a steady flow of US dollars into China, fuelling the manufacturing of cheap export goods, the writer says. PHOTO: NYTIMES
Updated
Sep 03, 2019, 07:13 AM
Published
Sep 03, 2019, 05:00 AM
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If the trade war's objective is to even the playing field for American firms, President Donald Trump isn't going about it the right way.

China's easy access to US dollars over the past decade has fuelled asset bubbles, driven an overseas debt binge and laid the groundwork for its low-cost, export-driven economy. Only cutting off the supply of cheap money will reverse this.

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A version of this article appeared in the print edition of The Straits Times on September 03, 2019, with the headline A better way the US can fight trade war with China. Subscribe

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