BusinessWeek ran an interesting piece last week on the question of what happens to the U.S-China commercial relationship if Barack Obama wins the White House.

What does happen? The answer seems to be, "it depends."

Let me stop here and say that I'm a fan. I don't agree with Obama on everything, but I like him better that the alternative (by a long shot) and I have a sign in my yard. That said...

If Obama is elected and the Democrats carry through with his ideas about the Chinese currency situation, we're probably looking at a trade war. Democrats have promised to back legislation that would define currency manipulation as an illegal subsidy. The Chinese would probably respond with a tax on exports that would get passed on to US consumers. Things go downhill from there.

Or once he gets elected Obama could decide that a trade war doesn't really help anybody. Right? Read the BusinessWeek article for yourself to see the options explored in more detail.


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