China and Currency Manipulation

China and Currency Manipulation

By exploiting world currency markets, countries like China and Japan effectively subsidize their exports to the United States, and place a tariff on U.S. shipments to them. This manipulation is taking place on a massive scale. By some estimates, China’s yuan is undervalued by as much as 40 percent compared with the U.S. dollar, and eliminating that artifical devaluation would lead to significant employment gains across America.

China’s currency manipulation has contributed to the dramatic increase in the U.S. bilateral trade deficit with China, which now tops $318 billion a year. China has amassed foreign exchange reserves of more than $3.8 trillion, far surpassing any other nation’s reserves.

China’s currency manipulation also attracts foreign investment into China and away from American manufacturing facilities. This flow of investment already has cost Americans billions of dollars in lost wages. When countries adopt artificial exchange rates not based on market forces, they not only exacerbate the U.S. trade imbalance, but they create global trade imbalances. Additionally, currency manipulation results in a sizeable difference in labor costs. This difference creates the illusion of a comparative advantage for a given country. Ultimately, currency manipulation is a subsidy that can put American manufacturers at an unfair disadvantage in the global marketplace.

Ending that subsidy, however, would create millions of jobs in every state.

@KeepitMadeinUSA on Twitter

  • RT @ebrotherton: Manufacturing sector added 28,000 jobs in July. Best showing since November 2013. But more work to do: http://t.co/GAP8HEE… 19 min 20 sec ago
  • Manufacturing punched above its weight in July. Rebound in the sector possible. But we still have a long way to go: http://t.co/W2RQm9xwMH 34 min 48 sec ago
  • RT @tlanddc: Adding +28,000k manufacturing jobs, closest @BarackObama has come to keep on track with his goal of 1M by end of second term #… 50 min 14 sec ago
  • #AAMeter RT @ScottPaulAAM The auto sector accounted for over half of #manufacturing job growth in July: 14.6k of 28k total jobs added. 50 min 25 sec ago
  • 28K new manufacturing jobs in July the 2nd time in Obama's 2nd term job numbers on target to hit Obama's 1 million new jobs goal. #AAMeter 1 hour 8 min ago
  • RT @ScottPaulAAM: Good backward revisions to #manufacturing. 15k in May, 23k in June. Overall, we're at 12.16 million #mfg jobs. (pre-reces… 1 hour 13 min ago
  • The 28,000 new manufacturing jobs in June is the best number since November 2013. #AAMeter 1 hour 17 min ago
  • WOW: 28,000 new manufacturing jobs were created in July. Obama needs 28,133 jobs per month to hit his 1 million jobs goal. #AAMeter 1 hour 19 min ago
  • ICYMI: Senate passed House version of Highway Trust Fund patch last nite. Funded thru May. Now we need a long-term plan for infrastructure. 2 hours 45 min ago
  • RT @MarkRuffalo: Tesla and Panasonic Agree to Build Factory in U.S. http://t.co/xyLIV7IFyj Renewable energy brings manufacturing back to USA 2 hours 53 min ago