Five things you may not know about currency manipulation
This morning the Pittsburgh Post-Gazette ran an op-ed penned by President of the Alliance for American Manufacturing (AAM) President Scott Paul. In the piece, Paul argues the case for President Obama and Congress to get tough on China's currency manipulation.
From Paul's op-ed, here are five things you may not know about the U.S. trade deficit and how it's affected by currency manipulation:
1.) The U.S. trade deficit with China was $315 billion last year. Another way of putting that? More than the combined revenue of General Motors and General Electric during that year, or that it's larger than the gross domestic product of Denmark.
2.) Since we granted normalized trade relations to Beijing over a decade ago, we've traded production capacity and about 2.7 million middle-class jobs (including more than 100,000 jobs in Pennsylvania) to China in order to live high on the consumption hog.
3.) Currency manipulation doesn't just pose an economic threat, it poses security threats as well. The Chinese government subsidizes competitive industries, forces American companies to transfer intellectual property when accessing the Chinese market, ignores widespread counterfeiting and sponsors cyber-espionage against U.S. targets, stealing everything from Coca-Cola trade secrets to Pentagon missile-defense plans.
4.) Even the slightest pressure from the U.S. has, in the past, prompted China to more appropriately value the Yuan. A Senate procedural vote in 2005 that marked the first step toward addressing Beijing's currency manipulation provoked an immediate rise in the yuan. And when then-Treasury Secretary Timothy Geithner threatened action ahead of a G-20 meeting in 2010, the yuan rose.
5.) Currency manipulation is an assault on free market principles. China distorts the market with its rigged currency, and has exponentially expanded its wealth -- with American companies and workers paying the price.
As we mentioned here yesterday, there is a bill in Congress that would punish China for its currency manipulation. Please send your Member of Congress a note requesting that they support the Currency Reform for Fair Trade Act.
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