As China continues unfair trade practices, policymakers attempt to resolve the issue by penalizing China.  According to the Wall Street Journal, the Senate plans to introduce legislation backed by Democrats Charles Schumer and Sherrod Brown, Republican Lindsey Graham and others, which would penalize China for keeping its currency undervalued. This legislation carries provisions for trade sanctions against China. The article proceeds to offer the viewpoints of Republican Presidential Candidates on the topic of China. Mitt Romney supports a policy he terms “Confronting China,” which includes labeling China as a currency manipulator. I am uncertain of the effectiveness of such measures.

         Certainly China’s practices are to the detriment of the U.S., but we have few ways to stop their actions without imposing further damage upon our ailing economy. If we proceed with the policy backed by Romney and many other politicians, the U.S. may incur severe repercussions. For example, the Council of Foreign relations asserts  using the term "manipulation,"  would trigger negotiations between the two countries and may lead to economic sanctions.  

        To a similar outcome, Romney advocates unilateral sanctions and forbidding the U.S. government from buying Chinese goods and services. As China is one of the largest markets for U.S. goods, restricting the importing of U.S. goods there would harm U.S. businesses through cutting demand for their products, as unilateral sanctions would lessen their consumers. The result of unilateral sanctions would be an inefficient market and potentially no solvency as  unilateral sanctions rarely, if ever, successfully provoke nations to significantly change their policies to meet U.S. demands. Forbidding the purchase of Chinese goods would also create inefficiencies, as the U.S. is currently unprepared for an outflow of Chinese goods. 

      Also according to the CFR, focusing on China's currency may distract from focus on other sources of U.S. economic shortcomings.  Morgan Stanley's Stephen Roach believes the currency  issue is a "red herring” for U.S. policymakers and that the U.S. should instead focus efforts on boosting U.S. savings in order to “redirect the economy away from excess consumption towards more of a savings-based economy, as then and only then can we wean ourselves off of Chinese products."