ASIAN INFLATION IMPACTS U.S.

With so many cheap goods imported from China, Vietnam, South Korea, and Japan, as inflation increases in those countries, shoppers at places like Wal-Mart in the United States are going to pay higher prices, putting pressure on U.S. consumers and increasing U.S. inflationary pressures.

From The New York Times:

The free ride for American consumers is ending. For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries — first Japan and Korea, then China, and now increasingly places like Vietnam and India.

But mounting inflation in the developing world, especially Asia, is threatening that arrangement, and not just in China, where rising energy and labor costs have already made exports to the United States more expensive, but in the lower-cost alternatives to China, too.

“Inflation is the major threat to Asian countries,” said Jong-Wha Lee, the head of the Asian Development Bank’s office of regional economic integration.

It is also a threat to Western consumers because Asian exporters, even in very poor countries, are passing their rising costs on to customers.