People Are Paying Attention to Lack of Action on China's Currency Manipulation
Posted by scapozzola on 09/01/2010
As we reported yesterday, the U.S. Department of Commerce rejected arguments that China’s undervalued Yuan acts as an export subsidy.
In response, Alliance for American Manufacturing (AAM) Executive Director Scott Paul issued a strong statement expressing AAM's deep disappointment on Commerce's failure to act.
It looks like the media have been following the story of China's currency manipulation very closely of late, and Paul's statement was widely reported.
Bloomberg News reporter Mark Drajem said that the Commerce Department decision focused on "whether China's currency policies represent a financial contribution to exporters and provided specific benefit." Drajem quoted Paul as saying "It's now up to Congress to pass legislation" to address "the devastating impact of currency manipulation."
Reuters correspondent Doug Palmer observed that the Commerce Department decision would likely be "prompting renewed calls for Congress to act" on the currency issue. He also cited Paul's quote on the need for Congress to implement "penalties for subsidies and dumping."
The Wall Street Journal's Meena Thiruvengadam and Robert Guy Matthews reported on the Commerce Department's finding that "the Chinese government unfairly subsidized $514 million of aluminum exports to the U.S. last year." They also analyzed the Commerce decision to not "investigate allegations that China's currency policies function as export subsidies for Chinese manufacturers of aluminum and coated paper." In reaction, they cited Paul's quote on the need for Congress to "pass legislation to strengthen and modernize our trade laws."
The discussion on China's currency manipulation now moves to Capitol Hill where potential legislative measures are brewing.
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“Mr. Krugman suggested the
“Mr. Krugman suggested the Federal Reserve follow a policy with an increase in inflation. Better for national debt? Suppose the Federal Reserve did nothing and this inflation was created by legislation to protect our environment. We need inflation, but not in the institutions lending money to small buisness and homebuyers. We need inflation in the cost of foreign imports. Following excerpt from a Dec 2009 report for Congress.
“Although estimates of the costs of ballast treatment may be imprecise and vary from vessel to
vessel, there is some general agreement on average costs.14 For example, it may cost an estimated $400,000 per vessel for modification of container/bulk vessels to use onshore ballast water treatment facilities at California ports. More generally, the cost of retrofitting vessels to treat
ballast water has been estimated at between $200,000 and $310,000 per vessel for mechanical
treatment and around $300,000 for chemical treatment.15 Most of this expense will be borne by
foreign shipping companies, as the U.S. flag fleet is a small percentage of the global fleet,16 and
likely passed along to consumers of products imported on these ships.”
This legislation may hurt our largest employers, and it may help produce jobs that will stay in America, if implemented fast enough. Delay means, foreign shipping industry is gearing for "change" while Americans sit idle. Currently only a twenty year Coast Guard phase in plan with another study where the military has to offer incentives to foreign ships is what we have.”