International Law

Will They Or Won?t They? The Annual U.S. Report on Currency Manipulation

By Stan

We go through this every year. The Bush administration was never able to pull the trigger and label China as a currency manipulator, despite some very aggressive lobbying by industry groups.

For the record, I’m not in favor of purposely embarassing China on an issue over which they have no feasible policy options at the present time. Releasing a report labeling China a currency manipulator will not lead to any substantive changes over here. It will, however, lead to two things: certain lobbying groups along with some left-leaning members of the US Congress will be happy, and the government here in Beijing will get pissed off, negatively effecting bilateral relations for a while.

The heads-up from Reuters:

The Obama administration could label China as a currency manipulator when it takes its first official stab at the controversial issue in a report due on Wednesday, a top U.S. business official said.

“I expect them to label China a currency manipulator, with some ameliorative language to soften it a bit — which won’t make the Chinese any less irritated,” said Bill Reinsch, president of the National Foreign Trade Council, which represents major exporters such as Boeing (BA.N).

Reinsch, however, also said he expected the highly sensitive semi-annual U.S. Treasury Department report would be delayed, as routinely occurred during the administration of former President George W. Bush.

Asked if the report would be released on Wednesday, Treasury Department spokeswoman Heather Wong said she could only say the report would come “soon.”

The National Association of Manufacturers, the AFL-CIO labor federation and many other groups pressed the Bush administration for years to formally label China a currency manipulator in a semi-annual report on the exchange rate practices of major U.S. trading partners.

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Full post as published by China Hearsay on April 14, 2009 (boomark / email).