Vastavam web: Expressing concerns over China’s currency actions, a top American Senator has urged President Donald Trump to name Beijing as a “currency manipulator”. Raising concerns about the depreciation of the Chinese yuan against the US dollar, Senator Tammy Baldwin in a letter to Trump said that ever since his administration’s tariff actions began in the spring, the Chinese yuan has fallen nine per cent.
Writing to Trump ahead of the release of the bi-annual report that identified currency manipulators, Baldwin reminded Trump about his election promise that he would declare China a currency manipulator on the very first day. Baldwin alleged that the current misalignment makes Chinese exports nine per cent cheaper in dollar terms, while also making US exports to China nine per cent more expensive.
“This combined import tariff and export subsidy amounts to a roughly USD59 billion total trade impact – almost double the approximately USD32.5 billion of tariffs the US has levied against Chinese imports under Section 301 of the Trade Act of 1974 – even before accounting for the retaliatory tariffs implemented by China to counteract US tariffs,” the Senator said.
Observing that since China joined the WTO in 2001 the US trade deficit with China has more than quadrupled, Baldwin said that between 2001 and 2008, Chinese competition cost the US 2.4 million manufacturing jobs and has driven down wages for almost all production workers in the private sector workforce. “Naming China a currency manipulator would set off bilateral talks required under the Trade Facilitation and Trade Enforcement Act of 2015 –intended to encourage China to adopt policies to correct undervaluation. If the talks fail, the Trade Facilitation and Trade Enforcement Act of 2015 provides additional authorities for the President to take remedial action,” she said.
The US and China are locked in a trade spat which began in April with Trump imposing tariffs on steel and aluminum imports into US. China retaliated by imposing additional tariffs worth about USD three billion on 128 US products.