Treasury Bats Zero for 12 at the Currency Plate: AAM Statement
Exchange Rate Report acknowledges undervalued yuan, but won't call China a manipulator.
Washington, D.C. – The U.S. Department of Treasury released its semi-annual Report to Congress on International Economic and Exchange Rate Policies today. This was the 12th opportunity under the Obama administration for Treasury to name China a currency manipulator – an opportunity it passed on by not citing China or Japan for currency manipulation.
Commented Alliance for American Manufacturing (AAM) President Scott Paul:
“The decision by the Treasury Department to avoid naming China and Japan as currency manipulators sends a clear signal to our trade partners that the welcome mat is out for mercantilism. While Treasury acknowledged undervaluation leading up to this report, its words ring hollow without follow-through.
“The yuan and yen are clearly undervalued and manipulated, and this disparity in exchange rates is one of the largest impediments to real and meaningful growth in U.S. manufacturing jobs. Today’s decision takes any pressure to play by the rules off of our trade partners.”
Treasury has noted some of these factors in the past and called out our trading partners for their actions. But with this report, their words appear empty and without force.
- The dollar/yuan exchange rate is roughly 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.