It is clear that the G-7 will come in with further intervention. They have made a commitment now and they must follow through.

The point is -- ad we know this from history -- that if currencies remain way out of line, trade protectionism follows.

The failure to get progress on the economic issues may undermine the overall relationship and then make it harder to work together on the security concerns.

It's a big mistake not to label China if the U.S. law has any meaning. They are still intervening massively to keep their currency from rising. I don't see how you can not define that as manipulation.

The failure of China to permit its currency to move, as most other countries in the world are doing, leads to a major protectionist trade reaction here in the United States.

Traditionally, when the European integration process gets hit by a blow like this, they regroup and usually use it as a spur for progress.