AEM 429 - AEM 429 International Finance Professor David Ng Problem set 3 1 A news article reports the following"WASHINGTON(AFX US manufacturers

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AEM 429 International Finance Professor David Ng Problem set 3 1. A news article reports the following: WASHINGTON (AFX) - US manufacturers demanded action against a 'predatory' China after new data showed the US trade deficit with the country on course to surpass 200 bln usd in 2005. 'Enough is enough,' said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition (AMTAC), after the Commerce Department reported the US trade deficit stood at 64.2 bln usd in November. The deficit with China accounted for more than one- quarter of the total November gap, at 18.5 bln usd. For the 11 months to November, the China deficit reached 185 bln usd, and should top 200 bln in December. Tantillo said China 'runs a massive trade surplus with the United States, manipulates its currency, subsidizes its banking and industrial sector, and misreports its economic numbers'. a) Why is the US trade deficit with China a problem? Because the U.S won’t be able to pay back
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This note was uploaded on 05/23/2008 for the course AEM 4290 taught by Professor Ng,d. during the Spring '08 term at Cornell University (Engineering School).

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