If China has been trying to weaken the dollar, they haven't really been very effective. The dollar by any measure is quite strong -- too strong in fact for US exporters over the long-term. If Chinese sales impeded US monetary policy transmission (and caused a steepening of the US yield curve that worked against US monetary policy goals) the Fed knows what to do. The national security world spends a bit too much time worrying about the threat posed by Chinese sales of treasuries, and not enough time worrying about the threat to the industrial base (including the defense industrial base) posed by a weak yuan.
other issue, the US could finance a meaningful portion of its current industrial policy over time by ending the de-industrial policy components of the current tax code that favor offshoring.
The US currently collects almost no tax from its major pharmaceutical companies, which increasingly produce offshore for the US market as well. It equally collects little tax on Apple (and for that matter Microsoft's) profits on sales outside the US.
the debate over the fiscal cost of industrial policy is still a bit premature. pick the very low hanging fruit first (change the pro offshoring parts of the current corporate tax code and then we can talk)
If China has been trying to weaken the dollar, they haven't really been very effective. The dollar by any measure is quite strong -- too strong in fact for US exporters over the long-term. If Chinese sales impeded US monetary policy transmission (and caused a steepening of the US yield curve that worked against US monetary policy goals) the Fed knows what to do. The national security world spends a bit too much time worrying about the threat posed by Chinese sales of treasuries, and not enough time worrying about the threat to the industrial base (including the defense industrial base) posed by a weak yuan.
other issue, the US could finance a meaningful portion of its current industrial policy over time by ending the de-industrial policy components of the current tax code that favor offshoring.
The US currently collects almost no tax from its major pharmaceutical companies, which increasingly produce offshore for the US market as well. It equally collects little tax on Apple (and for that matter Microsoft's) profits on sales outside the US.
the debate over the fiscal cost of industrial policy is still a bit premature. pick the very low hanging fruit first (change the pro offshoring parts of the current corporate tax code and then we can talk)
https://prada.substack.com/p/make-china-and-america-great-together