A nice reader tipped me off to a great shopping site called Shop for America. It carries a huge range of products made in the USA and should come in handy during the holiday shopping season. While exploring over there I noticed a great blog. And that blog linked to an excellent story on the dangers of China trade from the Science Monitor, written by Peter Navarro. I won’t republish the whole thing, but this is the most important part for you to take from it:

Here’s the clear and present danger: What may have started out as a simple mercantilist currency gambit for China to sell its exports cheap and keep imports dear has morphed into a powerful weapon to hold off any effective US response to China’s unfair trade practices. And make no mistake: Such practices run the gamut from a complex web of illegal export subsidies and currency manipulation to rampant piracy and woefully lax environmental, health, and safety standards.

From time to time, US politicians have railed against these practices – and the collateral hollowing out of America that China’s “weapons of mass production” have brought about. However, any time that the Bush administration or Congress threatens any kind of significant and tangible action – as opposed to simply beating its chest – China can now credibly threaten to stop financing US deficits and start dumping greenbacks.

This is a very credible threat. If executed, inflation, the costs of imports, and interest and mortgage rates would skyrocket. With higher housing costs leading the way, consumers would soon be overburdened. The result: a nasty stagflation shock.

Some say that the Chinese would never take such an action because it would hurt them as much as Americans. But it’s Beijing’s view that the Chinese people are far tougher and better able to withstand any economic shock than Americans who’ve grown soft living the good life – and they are probably right. Chinese officials also take a far longer view of strategic action. So if a “dump the greenbacks” strategy needs to be implemented to break the back of a rising American protectionism, to secure Taiwan, or to achieve any other strategic goals, sobeit.

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