“I am aware of no credible evidence that” an increase in the value of the yuan relative to the U.S. dollar “would significantly increase manufacturing activity and jobs in the United States” which some “mistakenly believe”. [Emphasis added]
Those are the words of Federal Reserve Chairman Alan Greenspan, yesterday urging the Senate Finance Committee to avoid protectionist measures, such as the current proposal by some protectionist politicians to slap a 27.5% tariff on Chinese goods if China does not revalue the yuan.
Greenspan went on to say that “U.S. imports of textiles … assembled computers, toys and similar products would in part shift from China as the final assembler to other emerging-market economies in Asia and perhaps in Latin America, as well… Few, if any, American jobs would be protected.”
Perhaps Greenspan’s words will stop some of the rabid protectionists in Congress from shooting their mouths off for a few days. Or perhaps not.