China's exchange rate shenanigans have cost America jobs

Posted by mmcmullan on 03/18/2014

The Wall Street Journal ran a story recently on the recent decline in the value of the yuan, China’s currency. Being a Wall Street Journal article, it treats with chief concern the amount of money that currency speculators – both large corporations and the spare, incredibly wealthy individual who have bet on the yuan’s slow-as-molasses-but-steady appreciation – stand to lose by sudden drops in the yuan’s value:

While the recent declines likely aren't big enough to trigger a stampede out of the yuan, the added volatility in the exchange rate may give some investors pause.

The wider trading band also means there is more scope now for the yuan to depreciate on a day-to-day basis, which makes the yuan less of a guaranteed source of returns for many investors.

Yes, it’s a real bummer for those speculators. But anyway, way deep down in the story, delivered as almost an aside, is some truth that we found particularly interesting:

For some companies, losses on yuan bets will be offset by the benefits of a weaker currency, including lower operating costs and increased demand for their exports.

"A weaker yuan helps China’s exporters?"  Then the yuan’s sudden drop couldn’t possibly have anything to do with the rare trade deficit that China ran last month, could it?

Whether it does or not, all of these recent developments confirm that, by simple definition, China manipulates its currency, which remains undervalued. It manipulates its currency to build large trade surpluses with its largest trading partner. And those trade deficits have cost its larger trading partner millions of jobs.

That very large trading partner, meanwhile, could create millions of jobs by passing legislation that would allow currency manipulation to be treated in trade cases like the subsidy that it is.

Related recent Blogs

@KeepitMadeinUSA on Twitter

  • A #MadeinAmerica @TervisTumbler will keep your drink cold during the hot summer months: http://t.co/hXDkQruOuT 1 hour 45 min ago
  • .@SecretaryFoxx & 11 former transportation secretaries urge Congress to pass a long-term transportation funding bill: http://t.co/e1T5IJ0Izl 2 hours 20 min ago
  • We agree with @SecretaryFoxx: We need a long-term transportation infrastructure spending plan. http://t.co/0km740jVEW Will Congress listen? 19 hours 57 min ago
  • .@SecretaryFoxx says long-term transportation plan needed. Doing so (w/ Buy America policies) will create jobs: http://t.co/greHym2C6x 21 hours 10 min ago
  • .@SecretaryFoxx says US transportation system "crumbling" in speech calling for a long-term spending plan: http://t.co/lgOu6ZjYoe 21 hours 23 min ago
  • In @PressClubDC speech, @SecretaryFoxx calls for a long-term transportation spending plan instead of short-term fixes to Highway Trust Fund. 21 hours 26 min ago
  • 9 fun facts abt NY’s bridges, @Buzzfeed! Wouldn't it be great if a No. 10 told us they were all Made in the USA? http://t.co/YdicwMUKoq 21 hours 50 min ago
  • .@Politico poll: Economy voters' top worry. To boost economy & create jobs, we shld rebuild our infrastructure w/ Buy America requirements. 22 hours 28 min ago
  • No. 1 issue for voters is economy, @Politico poll finds. Voters also call manufacturing jobs a top economic concern: http://t.co/wN34O8kOwE 22 hours 58 min ago
  • RT @MarkAAMphilly: Philly Online start-up makes it easier to buy American http://t.co/NDud4bYRh2 via @phillydotcom @KeepitMadeinUSA 23 hours 3 min ago