Experts Agree, Obama Needs to Put the Pressure on China
Hey Congress…are you listening?
Experts of all political persuasions agree that China is taking advantage of the United States and subsequently causing serious harm to the U.S. economy and American jobs.
Fred Bergstein wrote in the Financial Times today that gross global imbalances have reached a point where Obama will need to privately inform Beijing that America has labeled China a currency manipulator and will take issue with the WTO should Chinese leaders not let the yuan appreciate to reflect the global market.
Bergstein outlines the policy conflict with China, claiming it "plays out on three fronts," and implicating actions taken, and not taken, by Congress.
First, "the House of Representatives has passed a bill authorising countervailing import duties against the export subsidies created by undervalued exchange rates as with China. The Senate needs merely to attach this language to "must" legislation, such as extension of the tax cuts, and it will land on Mr. Obama's desk for almost certain signature."
Second is the infamous Treasury report, "delayed from its due date of October 15 pending further evidence of China's exchange rate intentions and the Group 20 summit."
But what happened there? Bergstein says, "The Seoul outcome was minimal and the average value of the renminbi has weakened since China accounced "greater flexibility" in June."
Last, Hu Jintao will visit Washington in January but Bergsteign says "it is hard to see what they can agree that they were unable to do at the G20 summit."
It is becoming increasingly obvious that intense pressure from the Obama administration and Congress seems to be the only way to get China to revalue their currency.
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