I remember back in the early 90's when China started selling products abroad and everybody thought that it was a fantastic idea that China pegged their currency to the dollar because their economy was insignificant. Now everybody is screaming "it’s not fair!"
But seriously, if all Chinese goods were cut off from the American market and everything would have to be produced domestically would you accept the sharply rising cost of goods?

The premise that trade is beneficial to every participants regardless of how the rules are played derive from the fact that trade allocates resources efficiently so people & firms will produce goods and services at the lowest opportunity costs. In another word, trade allows everyone to have more goods and services at the same amount of input.

Put simply,even if only US allow free movement of goods and services and everyone else pegs their currency to the US and has high tariffs against US products and services, US's economy will improve.

Specifically, as someone mentioned, US helped not just the Asian Tigers to become industrialized, but also Western Europe after WWII, and reciprocally they helped strengthen the US economy as well since they become a vibrant market for American economy.

The great expansion of trade has been one of the cornerstone policies that helped make the First World countries as wealthy and developed as they are today.

And as for causes of the American recession are many and the argument to place blame on trade is weak and inrigorous.

For everyone's general information the yuan is still pegged, just not to the dollar. Its now pegged to a basket of currencies, including the dollar, euro, yen, ect. This allows for a little bit of flotation due to market flotations but due to the amount of currencies in the basket and the fact they they all float different directions, the result was only as slight revaluation of the yuan, it still mains vastly undervalued.

It is funny how picky the US is on who pegs their currencies. After Brentonwoods almost EVERYBODY pegged their currencies to the dollar, it was the basis of the world financial system. Since then, many countries have stopped doing that, adopting the currency basket approach or allowing their currencies to float "freely." Many economies still do, however, peg their currencies directly to the dollar.

The problem with China is that they are malicious about it. No one knows for certain how undervalued the yuan is, but conservative estimates rarely drop below 40%. Thats a lot, and makes their exports incredibly cheap. The problem is that they are deliberately manipulating the currency to keep that relationship.

Its merely got business sense on the Chinese part.
Work cheaper you lazy american bums.

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"Better to die on you feet than live on your knees" - Emilio Zapata

Concerning your first post, Celestial Child, I think you're overlooking the massive tariffs the US does put on many of its key industries, such as steel or cotton. The US has been pursuing a 'free' trade policy, and it has been devaluing its currency to effect that, as I understand it. That is also why it has been such a strong proponent of eroding the tariffs and trade barriers third world countries place on their industries to shield them from foreign competition.

The disaster this caused in Africa and Latin America during the 70s and 80s was well documented. Because Less Developed Countries (LDCs) couldn't develop their industries without competition from far more efficient foreign industries, their economies ended up imploding and this accounts for a surprising proportion of the economic woes of the region.

America has consistently been lobbying in the WTO, IMF and World Bank to force LDCs to eliminate trade barriers on their key industries, whilst being unwilling to liberalise their own key industries. I think you should revise your theories concerning American generosity to take this into account.