Washington's Domestic Foes

When American companies act in their own best interest

Published on April 25, 2006 By singrdave In World Trade Issues

In your opinion, who wields more domestic pressure on the international policy of a nation? It always depends on the issue, as far as I can see. If it is a globalization-related labor issue, expect the labor unions and multi-national corporations to get involved. If it is
military-related, like an arms treaty or the missile defense shield, expect the defense industry to have an opinion.

For example, the multi-national Wal*Mart has a lot to do with the fight against flotation of the Chinese yuan. A variable yuan, not pegged to the dollar but tradable on its own merits on the monetary exchanges, would inevitably rise. This would affect Wal*Mart's profit margins by raising the price of cheap Chinese consumer and electronic goods. So you can bet that Wal*Mart is lobbying Washington fiercely to back off pressuring China to float the yuan.

Sources:
Barker, Ned. "U.S. Trade with China: Expectations vs. Reality." PBS Online. Internet: Link, accessed 25 April 2006.

Lardy, Nicholas R. "The Economic Rise of China: Threat or Opportunity?" Federal Reserve Bank of Cleveland. Internet: Link, accessed 25 April 2006.

Comments

Dr Guy

on Apr 25, 2006

Business is its own self interest. However, not allowing currencies to float is just worthless. For then you get a black market trade in the difference, and the only loser is the government that pegs their currency to an arbitrary standard. Short Term , WalMart wins. Long term, it is a zero sum game. Paper is paper after all, and the worth of the paper is the confidence, or lack thereof, of the traders.

singrdave

on Apr 26, 2006

Short Term , WalMart wins. Long term, it is a zero sum game.

Wal*Mart is hoping to accentuate its profit margin by preventing legislation that would help America compete with China.

Is that >>gasp<< un-American? Or should a transnational business issue take precedence over national interests?

Dr Guy

on Apr 26, 2006

Wal*Mart is hoping to accentuate its profit margin by preventing legislation that would help America compete with China.

Is that >>gasp<< un-American? Or should a transnational business issue take precedence over national interests?

When WalMart starts dictating American Policy, I will be on the front lines to burn them in effigy or in reality. Until then, A business is a business. They act in self interest, not any other interest.

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