It’s Time for Action on China’s Exchange Rate
Will Treasury name China a currency manipulator in its forthcoming report?
Washington, D.C. – The U.S. Department of Treasury is due to release its semi-annual Report to Congress on International Economic and Exchange Rate Policies on Oct. 15. In its April report, U.S. Treasury Secretary Jack Lew acknowledged China’s continued actions to impede market determination, yet failed to name China as a currency manipulator.
In a letter sent to Secretary Lew today, Alliance for American Manufacturing (AAM) President Scott Paul said:
“We appreciate that Treasury has noted some of these factors in past reports and, from time to time, engages the governments of China and Japan in dialogue on currency manipulation. We fully expect you to engage your international colleagues this week during the annual International Monetary Fund meetings. Those words, however, mean little to the millions of U.S. manufacturing workers who expect a level playing field but have grown disenchanted with America’s inadequate response.”
Treasury has noted these factors in the past and called out our trading partners for their actions. But the situation has only grown worse in the last six months:
- The dollar/yuan exchange rate is the same this week as it was 17 months ago, falling 1.63 percent below its high-water mark in January 2014.
- Through August 2014, the U.S. goods trade deficit with China was $10 billion higher than in the same time period the previous year.
- China is not alone in its market distortions. Government officials in Japan have publicly acknowledged efforts to weaken the yen, which has lost 30 percent of its value against the dollar over the past 18 months.
The direct result of these actions: lost U.S. economic activity and jobs. Manufacturing job growth in the United States has weakened over the past three years – adding just 88,000 new jobs in 2013.