How can the U.S. start exporting more goods to China and other countries?
A bipartisan group of U.S. Senators recently introduced the Currency Exchange Rate Oversight Act of 2011 to provide recourse for U.S. manufacturers adversely affected by China's ongoing currency undervaluation.
In a letter to the Senate explaining the importance of this legislation, Alliance for American Manufacturing (AAM) Executive Director Scott Paul set the record straight regarding this new legislation:
Myth: Passing currency manipulation legislation would jeopardize access to the “fastest-growing market for U.S. exports” and any cost increases in China “will shift production to other low-cost manufacturing countries, not back to the United States.”
Fact: China’s currency manipulation acts as a massive tax on U.S. exports to China and removing this market distortion would make our goods more competitive in China and in other markets. American manufacturing can successfully compete against Chinese competition in our own market, in China, and in other markets, but only if the playing field is level.
Research by the Economic Policy Institute shows that exports to China and the rest of the world would increase and create jobs. “This is because China is the most important competitor for the United States in all other third country markets, even more important than Germany and all other members of the European Union combined. The effect of revaluation on exports will dominate, and is likely to generate most of the new job growth estimated above.”
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