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A new wave of protectionism would erupt into nuclear conflict

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A new wave of protectionism would erupt into nuclear conflict

Spicer, The Challenge from the East and the Rebirth of the West, 1996, p. 121

The choice facing the West today is much the same as that which faced the Soviet bloc after World War II: between meeting head-on the challenge of world trade with the adjustments and the benefits that it will bring, or of attempting to shut out markets that are growing and where a dynamic new pace is being set for innovative production. The problem about the second approach is not simply that it won't hold: satellite technology alone will ensure that he consumers will begin to demand those goods that the East is able to provide most cheaply. More fundamentally, it will guarantee the emergence of a fragmented world in which natural fears will be fanned and inflamed. A world divided into rigid trade blocs will be a deeply troubled and unstable place in which suspicion and ultimately envy will possibly erupt into a major war. I do not say that the converse will necessarily be true, that in a free trading world there will be an absence of all strife. Such a proposition would manifestly be absurd. But to trade is to become interdependent, and that is a good step in the direction of world stability. With nuclear weapons at two a penny, stability will be at a premium in the years ahead.

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  1. Protectionism

Protectionism is the biggest threat to US hegemony

Levey, 05 (David H., March/April, Foreign Affairs, “The Overstretch Myth.” Vol. 84 Issue 2, p2, 6p,

At the peak of its global power the United Kingdom was a net creditor, but as it entered the twentieth century, it started losing its economic dominance to Germany and the United States. In contrast, the United States is a large net debtor. But in its case, no plausible challenger to its economic leadership exists, and its share of the global economy will not decline. Focusing exclusively on the NIIP obscures the United States' institutional, technological, and demographic advantages. Such advantages are further bolstered by the underlying complementarities between the U.S. economy and the economies of the developing world--especially those in Asia. The United States continues to reap major gains from what Charles de Gaulle called its "exorbitant privilege," its unique role in providing global liquidity by running chronic external imbalances. The resulting inflow of productivity-enhancing capital has strengthened its underlying economic position. Only one development could upset this optimistic prognosis: an end to the technological dynamism, openness to trade, and flexibility that have powered the U.S. economy. The biggest threat to U.S. hegemony, accordingly, stems not from the sentiments of foreign investors, but from protectionism and isolationism at home.

  1. Manufacturing

Weak Yuan kills US manufacturing

USCC, 04 (US-China Economic and Security Review Commission, July, Report to Congress,

The dominant feature of U.S.-China economic relations is the U.S. goods trade deficit with China, which rose by more than twenty percent in 2003 to a record $124 billion. Over the past ten years, the U.S. deficit with China has grown at an average rate of 18.5 percent, and if it continues growing at this rate, it will double in approximately four years. The U.S. deficit with China now constitutes over twenty-three percent of the total U.S. goods trade deficit, and China is by far the largest country component of the overall U.S. deficit. Moreover, U.S. goods trade with China—with $28 billion in exports to China as compared with $152 billion in imports— is by far the United States’ most lopsided major manufacturing trade relationship as measured by the ratio of imports to exports. China is heavily dependent on the U.S. market, with exports to the United States constituting thirty-five percent of total Chinese exports in 2003, while only four percent of U.S. exports go to China. The trade deficit with China is of major concern because (i) it has contributed to the erosion of manufacturing jobs and jobless recovery in the United States, (ii) manufacturing is critical for the nation’s economic and national security, and (iii) the deficit has adversely impacted other sectors of the U.S. economy as well. A key factor contributing to the deficit is the undervaluation of the Chinese yuan against the U.S. dollar, which gives Chinese manufacturers a competitive advantage over U.S. manufacturers. Economic fundamentals suggest that the Chinese yuan is undervalued, with a growing consensus of economists estimating the level of undervaluation to be anywhere from fifteen to forty per cent. However, China persistently intervenes in the foreign exchange market to peg its exchange rate at 8.28 yuan per dollar. A second factor contributing to imbalances in U.S.-China trade is China’s mercantilist industrial and foreign direct investment policies. These policies involve a wide range of measures including technology transfer requirements, government subsidies, discriminatory tax relief, and limitations on market access for foreign companies. A third factor is China’s refusal to recognize workers’ rights which results in artificial barriers to wage increases.

Manufacturing key to US economy and heg

USCC, 04 (US-China Economic and Security Review Commission, July, Report to Congress,

The importance of manufacturing is captured in testimony before the Commission by Franklin J. Vargo, vice president for international economic affairs, National Association of Manufacturers: (t)he United States economy would collapse without manufacturing, as would our national security and our role in the world. That is because manufacturing is really the foundation of our economy, both in terms of innovation and production and in terms of supporting the rest of the economy. For example, many individuals point out that only about three percent of the U.S. workforce is on the farm, but they manage to feed the nation and export to the rest of the world. But how did this agricultural productivity come to be? It is because of the tractors and combines and satellite systems and fertilizers and advanced seeds, etc., that came from the genius and productivity of the manufacturing sector. Similarly, in services—can you envision an airline without airplanes? Fast food outlets without griddles and freezers? Insurance companies or banks without computers? Certainly not. The manufacturing industry is truly the innovation industry, without which the rest of the economy would not prosper.1

  1. Competitiveness

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