US Secretary of State Hillary Clinton told the Economic Club of New York that US economic strength and global leadership are a "package deal" and that asserting such leadership will not trigger a trade war.

As she affirmed the importance of American leadership - not only diplomatically and militarily - but also economically, Clinton told the 700 members of the elite club of business and industry leaders that recent legislation passed in the US senate will not trigger a trade war with China.  The bill, which is stalled in the Republican-controlled House of Representatives, threatens higher tariffs against China to pressure Beijing to let the value of the yuan rise.

“I don’t think there’s anything wrong with standing up and asserting ourselves. And I don’t see that leading into the kind of protectionism that you rightly warn about from the 1930s," she said, adding that "China has been gaming the trading system to hold down the value of its currency to give its companies a leg up. Its currency has appreciated, but not enough."

Clinton emphasized that anything the US does would be consistent with it international obligations including at the WTO (World Trade Organization) and she said it is a priority of the United States to ensure fair competition and rules that apply equally to everyone in the global market.

"It is not the United States alone saying: China needs to rebalance this artificial policy of (Yuan) depreciation which is good for their exporters, which disadvantages their own people in many ways,” Clinton said.

In the face of a world economic downturn, she warned, it is not the time for the US to focus inward, but rather, to be assertive in the global economy.  She reminded the gathering that it is a core mission of the US State Department to help American companies "seize opportunities around the world and bring down the barriers to trade, investment, and fair competition."

 "Enough of the world’s commerce now takes place with developing nations ... exempting them would render the whole system not just unfair but unworkable. And that would end up harming everyone."