What happens if China is designated a currency manipulator?
Kudos to Brian Wingfield for an excellent piece in Bloomberg News that asks what would happen if Mitt Romney followed through on his campaign pledge to designate China as a "currency manipulator."
Wingfield quotes Gov. Romney in the final presidential debate:
“On day one, I will label them a currency manipulator, which allows us to apply tariffs where they’re taking jobs,” Romney said during the Oct. 22 debate with President Barack Obama. “They’re stealing our intellectual property, our patents, our designs, our technology, hacking into our computers, counterfeiting our goods.”
Wingfield also quotes Alliance for American Manufacturing (AAM) Executive Director Scott Paul. He cites Paul's view that naming China a currency manipulator in itself won’t have much of an effect unless Romney is able to establish criteria to hold the country accountable.
According to Paul, those criteria may include the expected rate of appreciation, impact on the trade balance between the two nations, and a statement on how much the yuan is undervalued. Romney would also need to explain the consequences if the yuan didn’t appreciate.
“I have no doubt that Mitt Romney would name China a currency manipulator on day one,” he said. “The key is what happens after that.”
AAM has long supported designating China as acurrency manipulator.
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