China’s New Position as Largest Exporter May Spark Trade War

December 2, 2010

As more and more textile mills have moved out of the United States to China, the House Ways and Means Committee have voted to impose a tariff duty on China. China now buys very little in the way of imports from the United States and the European Union, while the United States imports expensive items from China.

In addition to the low buying on the part of China, the value of the yuan, the monetary unit in China is low. This is the reason why the United States closed five hundred textile mills over the past ten years. China has forty percent of the world’s textile market. Economists say this is causing tension between the United States and China which could lead to a trade war.

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