In the campaign Romney and Republicans promised to crack down on China’s currency manipulation on the “first day.” Yesterday the Obama administration again declined to label China as a currency manipulator, giving House Repubicans the opportunity to follow through on their promise.
Treasury Dept. Report Does Not Name China As Manipulator
Yesterday, the U.S. Department of the Treasury released its “Semi-Annual Report to Congress on International Economic and Exchange Rate Policies.” The report did NOT cite China as a currency manipulator, explaining,
Among other content, the report outlines the actions taken by China to appreciate its currency and move to a more market determined exchange rate. The renminbi (RMB) has appreciated by 9.3 percent in nominal terms and 12.6 percent in real terms against the dollar since June 2010. China’s trade and current account surpluses both have fallen to 2.6 percent of GDP from peaks of 8.8 and 10.1 percent of GDP , respectively. The Chinese authorities have substantially reduced the level of official intervention in exchange markets since the third quarter of 2011, and China has taken a series of steps to liberalize controls on capital movements, as part of a broader plan to move to a more flexible exchange rate regime.
But China is still manipulating its currency, costing American jobs, factories and industries. This is the opportunity that Congressional Republicans have been waiting for. The “China currency” bill — cracking down on China’s currency manipulation just as Romney and Republicans promised in the campaign — has passed the Senate but Speaker Boehner refuses to bring it up for a vote in the House. More than 60 House Republicans have co-sponsored the bill but so far refused to sign a “discharge petition” to bring the bill up for a vote. (Reason: Wall Street and giant multinationals profiting from sending jobs to China.)
Did I mention that Republicans promised during the campaign to crack down on China’s currency manipulation? And the more than 60 House Republicans co-sponsored a bill to do that?
Reuters, in the report U.S. declines to name China currency manipulator, explains,
During the U.S. presidential campaign, Republican candidate Mitt Romney pledged to label China a manipulator on his first day in office to show he would be tougher on the chief U.S. economic competitor than President Barack Obama.
Many U.S. businesses and lawmakers complain that Beijing keeps the value of its currency artificially low to gain an advantage in trade at the expense of American jobs.
Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM), said this about that:
“We’re disappointed that the Treasury Department has once again declined to designate China as a currency manipulator, which it most certainly is. Yes, the Yuan has appreciated somewhat against the dollar, but it is still far below an equilibrium value. The best evidence of that, other than China’s massive foreign currency reserves, is our bilateral trade deficit, which is on pace to top last year’s record $295 billion.
“There is an alternative to this inaction: Congress could still pass the popular, bipartisan bill that would deter China and other nations from manipulating their currencies. Speaker Boehner, over to you.”
Utah Senator Orin Hatch issued a statement explaining why House Republicans should bring this bill to the floor for a vote:
“Not only did the Obama Administration miss the deadline for issuing this report, they’ve added insult to injury by failing to take it seriously. Given our large and growing trade imbalance with China, it is simply inexcusable for the White House to continually shirk its statutory obligations and refuse to take this issue head on. The Obama administration has also failed to respond to my request for a clear explanation of the role of currency manipulation in the context of Trans Pacific Partnership negotiations, even though a new round is scheduled to begin this week. The economic problems our country faces demand strong Presidential leadership. Ignoring critical trade issues and issuing late reports that are simply more of the same, are a poor substitute.”