The ripple effects from the U.S.-China standoff could spread far and wide. Billions in trade, crucial to both countries, may hang in the balance. Also at stake could be U.S. arms sales to Taiwan, Beijing's bid to host the Olympics and the credibility of presidents Bush and Jiang Zemin. The stakes are about as high as they can get. Both sides' economies could suffer if relations continue to fray from the dispute over the U.S. Navy spy plane and its 24-member crew held by China.
China is the United States' fourth-biggest trading partner.
The cost of cheap goods from China would rise and the Chinese could retaliate by restricting American exports to the world's most populous nation, changing the economic climate in both countries, he said. While most analysts believe the standoff will be resolved before it comes to that, some economic damage already may have been done. Short term, there are a number of more limited potential repercussions. Some members of Congress already have scratched Beijing off their spring travel itineraries. And the White House was peppered with questions Monday about whether President Bush still intends to pay a state visit to China this fall.