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June 23, 2005    

Greenspan warns against Chinese import tariffs

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by Brian Turner
Greenspan warns against Chinese import tariffs

In testimony before the US Senate finance committee on Thursday, Federal Reserve chairman Alan Greenspan said that trade sanctions against China would not benefit the United States.

On the contrary, Mr. Greenspan said that the tariffs recently proposed against China would not preserve US jobs because less imports from China would only mean more imports from other low-cost markets in Asia and Latin America.

He also insisted that higher tariffs would threaten worldwide growth in livings standards and that the United States would not be exempt from this threat.

In a related issue, Mr. Greenspan said that revaluation of China’s currency would help China, but he contradicted the idea that a revaluation would do anything to stimulate manufacturing and jobs in the US.

John Snow, the US Treasury secretary who has been pushing for Chinese revaluation also reiterated the administration’s call for China to revalue his currency as he also spoke before the committee.

The current hearings are addressing concerns about increasing exports out of China and China’s growing interest in US investments.

This is especially relevant after Wednesday’s launch by China National Offshore Oil Corporation of a bid of nearly $20 billion for US oil company Unocal.

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