The China Syndrome - totalitarian governments can just set their currency value by decree
China's central planners are simply taking advantage of America's kind ways, free enterprise system, and ridiculous trade policies. They have dictated by government decree what the exchange rate will be between their currency (RMB or yuan) and the US dollar. China has vastly undervalued their currency so they can sell to us, and we can not sell to them. China is a communist, totalitarian government that strictly controls who, where, why, when, and the amount of all currency exchanges.
For comparison, the euro and the US dollar has their value set by the international markets. Both currencies are freely traded. If the euro gets high, then traders sell the euro and buy the dollar which has the effect of lowering the value of the euro. The US sells goods to Europe, and Europe sells goods to the US. Both benefit from the trade, and consumers on both sides of the ocean get a better variety of goods.
What would happen if the euro was suddenly lowered to half value by government decree? Lets say, for example, the euro and dollar are equal in value ($1 = € 1), and all is fine. Lets also say that Europe was communist, and the central planners lowered the value of their currency so $1 = € 2. All of a sudden a $1 widget made in the US and exported to Europe now costs € 2, which is too expensive since the locally made widget only costs € 1. All of a sudden, a € 1 widget made in Europe costs only $0.50 when purchased in the US, which is now a terrific value and is snapped up by American consumers since the locally made widgets costs $1. In other words, in this fictitious scenario, Europe could sell to the US, but the US could not sell to Europe.
Why does the US government let the Chinese central planners take advantage of us? China should try to increase their standard of living, but not at our expense. Wealth is not a zero sum game. Wealth can be gained without taking it from another country.
Our industry and manufacturing is closing at a record pace while China is building monster factories at a record pace.
The Solution
The solution is obvious. China has effectively placed at 100% tariff on imported goods from the United States and subsidized their exports by setting the value of their currency at half of what it should be by decree. Our bargaining chip to lower their 100% tariff is to place a 100% tariff on Chinese imports until they value their currency fairly by allowing the yuan to trade on the world currency markets. China would complain to the World Trade Organization (WTO), but who needs an organization that institutionalizes massive US trade deficits, guarantees the demise of American manufacturing and therefore puts our country on a path toward poverty? The United States joined the WTO with a politician's signature, and the US can resign from the WTO with a politician's signature.