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US delaying currencies report amid China dispute

US delaying currencies report amid China dispute

The Obama administration is delaying a report to Congress on currency policies amid calls from some lawmakers that it should cite China as a currency manipulator harmful to the U.S. economy.
Treasury Secretary Timothy Geithner said Saturday that he will delay publication of the report, due April 15, because several high-level international meetings in the coming months will be a better way to advance the United States' position.
Still, Geithner said in a statement that China should adopt "a more market-oriented exchange rate" to balance a U.S. trade deficit with China, which totaled $226.8 billion last year, the largest imbalance with any country. U.S. manufacturers say China's yuan is undervalued by as much as 40 percent and is a big reason for the massive trade deficit.
A stronger yuan versus the dollar would make U.S. products less expensive in China, while making Chinese goods more expensive for American consumers.
The administration is hoping that China will again allow its currency to rise in value against the dollar as a way of narrowing the trade gap _ as it did until mid-2008 when the global recession began to cut sharply into China's exports abroad.
Two weeks ago, a group of 130 House members sent a letter to the administration urging a citation of China as a currency manipulator. The lawmakers also called on the Commerce Department to impose trade sanctions on China on the basis that its currency system is an unfair trade practice.
In addition, 14 senators unveiled legislation calling for stiff trade sanctions against China if it doesn't let the yuan rise in value against the dollar.
China rejected the pressure from U.S. lawmakers and accused Washington of trade protectionism that Beijing said could hurt the global economic recovery. China insists it is not intentionally pursuing a trade surplus.
Geithner said then that the Treasury Department had not yet decided whether to cite China as a currency manipulator in the twice-annual report to Congress on the trade and currency policies of the United States' major trading partners.
Such a finding against China would trigger talks between the two nations _ with a threat of trade sanctions if the negotiations failed to resolve the issue. The Obama White House, following the lead of the Bush administration, has so far refused to formally peg China as a manipulator, believing that the more productive course would be to convince the Chinese that it is in their own interests to allow their currency to rise in value.
Sen. Charles Grassley, the senior Republican on the Senate Finance Committee, criticized the decision to delay the currency report and called on the administration to prepare an unfair trade case against China before the World Trade Organization.
"Everyone knows China is manipulating the value of its currency to gain an unfair advantage in international trade," Grassley said in a statement. "If we want the Chinese to take us seriously, we need to be willing to say so in public."
But Rep. Sander Levin, the Democrat is chairman of the House Ways and Means Committee, which oversees trade policies, said delaying the report has "a defined purpose."
"It is to see if, in the next few months, the international community will address the causes of major global imbalances, including China's substantial undervaluing of its currency, which hurts American jobs and businesses," Levin said. "If the multilateral effort does not result in China's making significant changes, the administration and Congress will have no choice but to take appropriate action."


Updated : 2021-07-29 05:48 GMT+08:00