I agree with Brad DeLong: The Democratic proposal to slap a punitive tax on Chinese goods and the people who buy them unless the People's Republic re-values its currency to something the US Congress is happy with is a bad idea, and Hillary Clinton and Barack Obama shouldn't be supporting it. As Brad says, it's "a classic threat to shoot ourselves in the foot."
Now where I tend to lose the plot is this. If mainstream economists like Brad think it's a bad idea to use threats of tariffs to push China into changing its exchange-rate policies, how come the economics mainstream seems to have so few complaints about the fact that it's completely normal for US trade negotiators to use exactly this sort of leverage to try to get other countries to change the intellectual properties policies or to privatize their water systems or what have you? Why is the threat to shoot ourselves in the foot okay when made on behalf of pharmaceutical companies and movie studios, but not when made on behalf of import-competing manufacturers? Often when I see this argument made, I feel like the point is -- aha! hypocrites! you should support our China bill after all! -- but I really do think Brad's right, this is a bad bill. But by the same token, the people who complain about this sort of thing ought to complain about the other sort of thing as well.
Photo by SEIU International used under a Creative Commons license