It is always dangerous to argue with the insane, but I am actually willing to answer Lou Dobbs question:
And what I can't quite figure out amongst these geniuses who are
so-called free traders is, why do they think that about a 35 percent to
40 percent undervaluation of the Chinese yuan to the dollar is free
trade? Why do they think 25 percent duties in tariffs on American
products entering China is free trade?
I will leave aside the question of how he or anybody else knows the yuan is undervalued by this much. I will accept his premise on the basis that we know the Chinese government spends money to keep the yuan lower than it might be otherwise. Here is my answer:
Yes, it is not perfectly free trade. But we let it continue because the freaking Chinese government, its consumers, and its taxpayers are subsidizing Americans. The Chinese government is making all of its consumers pay higher prices and higher taxes just so American consumers can have lower prices. Napoleon advised that one never should interrupt an enemy when he is making a mistake -- after all, this same strategy managed to earn Japan a decade and a half long recession. Our correct response is not tariffs, it is to say, "gee, thanks." This is for the Chinese people to stop, not our government.
Why is China doing this? Because it government is using monetary policy to help out a few favored exporters who have political influence at the expense of all of their consumers and exporters. And Lou Dobbs wants the US to respond exactly the same way, to punish our consumers to favor some of our favored politically-connected exporters so the Chinese consumers can have lower prices. Great plan. Is Lou Dobbs an Chinese agent?