According to this NY Times article, Obama insisted to Chinese Prime Minister Wen Jiabao that China must immediately revalue its currency and if “the Chinese don’t take actions, we have other means of protecting U.S. interests.”

This kind of tone with the Chinese plays great with Americans and domestic politics, and may be effective with China in the long-term.  But in the short-term, it makes the Chinese lose face and the Chinese government may do nothing for fear that they will be perceived as weak in the international community and among their own citizenry.

My view is that this statement by the American President in intended to show Americans that he’s serious about improving the economy, and that it serves as a real warning to the Chinese that Congress might put tariffs on Chinese goods if necessary.

Advertisements