Scott Paul in the Washington Post: How to deal with China’s currency manipulation
The Washington Post recently suggested that potential U.S. legislation to address China's continuing, illegal currency manipulation is a bad idea. The Post says any such bill would not be a "practical alternative to the Obama administration’s policy of patient jawboning." As proof that China listens to U.S. pleading, the Post praised Beijing for "allow[ing] its currency to appreciate against the dollar by about 9 percent over the past year."
The Post also worries that Beijing might retaliate against the U.S., "costing American growth and jobs."
Alliance for American Manufacturing (AAM) Executive Director Scott Paul vehemently disagreed with the Post's assessment and published a letter-to-the-editor today to set the record straight:
Letter to the Editor
How to deal with China’s currency manipulation
The Aug. 31 editorial “Breaking China?” made several dangerous suggestions about China’s job-killing currency manipulation policy.
Crediting China for a “9 percent” appreciation is nonsense. The Peterson Institute for International Economics reports that the yuan is more undervalued today (28.5 percent) than it was a year ago (24.2 percent).
The Currency Reform for Fair Trade Act does not mandate sanctions against China or any other nation. Rep. Dave Camp, the Republican chairman of the House Ways and Means Committee, who has supported the measure, said that the bill does not “presuppose an outcome,” but rather sends “a clear signal to China that Congress’ patience is running out, without giving China an excuse to take it out on U.S. companies and their workers.”
Addressing currency manipulation would help to reduce our massive $273 billion annual trade imbalance with China and could, according to the Economic Policy Institute, create as many as 2.25 million U.S. jobs while reducing our budget deficit by $71.4 billion annually.
History shows that China reacts only to political pressure and the threat of real consequences, which is why Congress should approve legislation on currency manipulation as soon as possible.
Scott N. Paul, Washington
The writer is executive director of the Alliance for American Manufacturing.
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