April 18, 2014: Another miss from Treasury on currency manipulation

Posted by mmcmullan on 04/18/2014

Good morning,

And welcome to the Early Shift. It’s a big weekend for Peeps fans out there. If you’re among the majority of Americans who didn’t win the Washington Post’s Peeps diorama contest, just eat them instead (and enjoy the pretty pictures).

But enough about Peeps (I know; there’s never enough). What’s happened this week in manufacturing news?

Well. The Department of the Treasury released its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies – which is an opportunity for the administration to call out currency manipulators. The Obama White House, now in its sixth year of governing, turned down the opportunity to get serious about China’s unfair exchange rate for the 11th time in a row (that’s 11 times after candidate Obama suggested he’d do otherwise while on the ’08 campaign trail). It’s an unfortunate fact that advocates for smarter trade policy have come to live with. Said Alliance for American Manufacturing (AAM) President Scott Paul:

(The Treasury report is) not a surprise. But it is surprising that the decision comes in the wake of China’s moves to both devalue the yuan in the short term and dramatically slow its appreciation over the past year.

In fact, the rate of the yuan’s appreciation is far less under President Obama than it was under President Bush.

But that’s not the only arena in which currency manipulation remains a topic of discussion: Ford Motor Company is continuing to push for a currency rule in the Trans-Pacific Partnership (TPP) trade negotiations. Reports the Detroit News:

The proposed …  trade pact is facing strong opposition from U.S. automakers and the United Auto Workers union. And in recent weeks the top two Democrats in Congress both said they oppose fast-track legislation that would allow for a quick up or down vote on an agreement without changes.

And ICYMI: Willy Shih, professor of management practice at Harvard Business School and something of an expert on the state of American manufacturing, gives the country’s efforts to revive the industry a C-. Read more about Shih’s take in IndustryWeek.

And that’s it. That’s it and that’s all, America. Have a heckuva weekend, and we’ll catch you after the holiday. Go easy on the chocolate this Sunday.


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