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Trade deficit hits US growth
By Peter Morici
Professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the US International Trade Commission
The United States should impose a tax on dollar-yuan conversions in an amount equal to China's currency market intervention. That would neutralize China's currency subsidies that steal US factories and jobs. That amount of the tax would be in Beijing's hands - if it reduced or eliminated currency market intervention, the tax would go down or disappear. The tax would not be protectionism; rather, in the face of virulent Chinese currency manipulation and mercantilism, it would be self defense.
Cutting the trade deficit in half, through domestic energy development and conservation, and offsetting Chinese exchange rate subsidies would increase GDP by about $525 billion a year and create at least 5 million jobs.