PMA on Capitol Hill: U.S. Government Fails to Act on China Currency ManipulationFebruary 1, 2008
Precision Metalforming Association (PMA) President William E. Gaskin said on December 20 he was “disappointed if not surprised” that the U.S. Treasury Department had declined once again to officially designate China as a currency manipulator for its longstanding practice of keeping the yuan artificially low.
In its semi-annual evaluation of U.S. trading partners, the Treasury Department called the yuan “severely undervalued” but failed to take action to officially sanction the country. China’s policy of maintaining a low currency gives its domestic producers an artificial advantage over the goods of competitors in other countries, including the United States, who price their goods in freely traded, higher-valued currencies. The practice places a particular burden on small and medium U.S. manufacturers whose goods are competing with Chinese firms in the global marketplace.
“PMA is disappointed that the Treasury Department once again opted not to cite China for its long-term failure to allow the yuan to rise to a level that reflects its true value,” said Gaskin. “We appreciate Secretary Paulson's continued dialogue with the Chinese government regarding undervaluation of the yuan, and we encourage the administration to work with Congress in support of legislation to address illegal currency manipulation, such as making it a countervailable subsidy. To that end, PMA applauds Senator Debbie Stabenow (D-MI) and Representative Joe Knollenberg (R-MI) for including language in the Consolidated Appropriations Act of 2007 that will direct the Secretary of the Treasury to report to Congress within the next four months on which U.S. trading partners are unfairly manipulating or misaligning their currency.”
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