China’s Currency Announcement: ‘Hokum’ and ‘Charade’
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The Chinese government’s announcement that it will allow its currency, the renminbi (RMB), also known as the yuan, to increase a small amount in value is a step in the right direction. But it is inadequate to address the “dramatic imbalances caused by many years of currency manipulation,” says AFL-CIO President Richard Trumka.
While acknowledging that the “AFL-CIO appreciates the efforts of the Obama administration to address China’s currency imbalances,” Trumka joined Charles Blum, executive director of the Fair Currency Coalition, in calling on Congress and the Obama administration to act to address the imbalance. Trumka also said the issue of currency imbalance should be on the agenda at the G-20 summit in Ontario later this week.
In a statement, Trumka said:
Chinese currency manipulation is an issue with global impact….Most economists believe that the renminbi is currently about 40 percent undervalued against the dollar. What is needed now is a commitment from the Chinese government to rectify this imbalance.
Momentum Building for Action on China Currency Manipulation
The momentum is building for the United States to take strong action to counteract manipulation of its currency by China’s government.
More than 130 members of Congress signed on to a letter from Reps. Mike Michaud (D-Maine) and Tim Ryan (D-Ohio) delivered today that urges Treasury Secretary Timothy Geithner and Commerce Secretary Gary Locke to take strong action up to and including countervailing duties (CVD) or tariffs because of currency manipulation.
Michaud and Ryan’s letter is the latest in growing calls by Congress and by top economists for the United States to act on the manipulation of currency by China’s government. If Geithner does act, the administration could impose remedies, such as tariffs, to create a fairer trade balance with China.
AFL-CIO President Richard Trumka, who co-chairs the Fair Currency Coalition, thanked Michaud and Ryan for their letter:
The working families of this country need jobs now. If we want a recovery that will invest in manufacturing, boost exports, balance trade, and create jobs we must stop China and other countries from illegally manipulating their currency. China’s prolonged undervaluation…is an illegal export subsidy. That is why the U.S. government must allow CVD cases to proceed. American workers expect their government to stand up for them.
Currency Reform Bill Could Help Create New Jobs
Unfair currency manipulation in the global economy is costing millions of American manufacturing jobs—and a coalition of labor, business and agriculture leaders say the Currency Reform for Fair Trade Act (CRFTA) is the best vehicle to stop the wholesale destruction of our manufacturing base.
At a Capitol Hill press conference today, members of the Fair Currency Coalition endorsed the bipartisan legislation introduced by Reps. Tim Ryan (D-Ohio) and Tim Murphy (R-Pa.) and Sens. Jim Bunning (R-Ky.) and Debbie Stabenow (D-Mich.). The bill would treat prolonged currency manipulation as an illegal subsidy and dumping under U.S. trade laws.
In a statement, AFL-CIO Secretary-Treasurer and Fair Currency Coalition Co-Chair Richard Trumka says job creation is the number one issue on the minds of the federation’s members.
While enacting the stimulus has provided critical short-term relief, the United States will not see sustained employment growth until our government stops China, Japan and others from using their undervalued currency to steal American jobs. That’s why Congress must pass the Ryan-Murphy CRFTA as quickly as possible.
