In this country, Treasury Secretary Rubin is right when he warns that we cannot continue to serve as the buyer of last resort. Our trade deficit is unsustainable economically and indefensible politically. Some of the most efficient steel companies and workers in the world find themselves submerged under a flood of low-priced steel from countries whose currencies have collapsed. Their reaction is fierce and utterly understandable. If the U.S. economy slows, as most observers believe it will, demands for protection and nationalist fears and anger will build rapidly.
Reform can sensibly begin by addressing the glaring contradictions of the current policy.
Consider our policy towards China. Already the radical right in our country is campaigning to isolate China for its human rights abuses, its repression of religious freedom, its military buildup. The AFL-CIO supports engagement with China. We think it foolish to pretend we can isolate a nation of 1.1 billion people. But current U.S. policy is indefensible.