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Section 11A(h) of the Export Administration Act authorizes the president both to prohibit the import of products or services from Imhausen into the United States and to block Imhausen from participating in any U.S. government contracts for up to five years.
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And, while call centers, internet sales, IT services, and remote education may be exportable, we currently import a considerable amount of these services.
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Those who pitch for manufacturing on the ground that it is better at boosting exports often ignore the fact that an increasing number of services are traded, and that rich countries tend to export more of them than they import.
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At the same time there will be a rise in prices of capital- and skill-intensive goods and services which China needs to import.
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Imports are subtracted, not because they pull down GDP, but, because not subtracting the import content of the other categories, would lead to an overstatement of spending on domestically produced goods and services and an overstatement of GDP.
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Import and export prices will be out Wednesday, and Bernanke is also testifying in front of the House Financial Services Committee that day.
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