Trump’s China-Sanctions Madness Imperils the Dollar

Last week US Treasury Secretary Steve Mnuchin warned the US will impose new sanctions on China if it doesn’t conform to UN sanctions on North Korea:
“If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U. S. and international dollar system, and that’s quite meaningful.”
In other words, the administration wants to sanction one of the US’s biggest trading partners, and the world’s second-largest economy.
China is the world’s third-largest recipient of Americans exports, behind only Canada and Mexico. China is the world’s largest source of imports for Americans, slightly ahead of both Mexico and Canada.
In 2016, Americans exported $169 billion in goods and services to China while importing $478 billion of goods and services. Every year, both consumers and producers benefit from the importation of Chinese electronics, machinery, food, footwear, and more.
Ratcheting up economic warfare with China could serve to cut off these avenues of trade and thus will only cost consumers and small business owners who currently benefit from lower-cost machinery, clothing, and more.

This post was published at Ludwig von Mises Institute on September 20, 2017.