Opinions Differ On Correct Course In Currency Debate
May 11, 2010
Steel Business Briefing

China and its currency were hot topics of discussion yesterday at the
Long Products Supply Chain Symposium yesterday in Milwaukee. Steel
Business Briefing was in attendance.

Charles Blum, director of
the Fair Currency Coalition, called for attendees to support the
Currency Reform and Fair Trade Act pending in Congress.

The proposed
Act would target exchange rate misalignment between the US dollar,
Chinese Yuan and other major currencies, as SBB has previously reported.
The legislation was introduced by Congressman Timothy Ryan in May 2009
and was referred to committee, but has yet to move forward, SBB
understands.

Senator Sherrod Brown (D-OH) chairs the Economic Policy subcommittee of the Senate Banking Committee.  He has called a hearing, set for Thursday, on currency issues.  The announcement is below the fold.

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Chuck Schumer and Debbie Stabenow have decided to merge their bills.  CPA’s Board of Directors have approved the following statement on this new Senate currency bill.  Here it is:

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CPA Official Statement:
S. 3134 The Currency Exchange Rate Oversight Reform Act of 2010

The Coalition for a Prosperous America welcomes the introduction of S.
3134 - The Currency Exchange Rate Oversight Reform Act of 2010 - by
Senators Schumer, Stabenow and Graham.  This bill has many good
elements, and CPA looks forward to improving it.

Currency manipulation by several countries, including but not limited to
China, is causing persistent trade deficits.  It is not the only cause
of our trade problems, but it is a substantial one.  Free trade cannot
exist when currencies are manipulated. 

This just out from the AP.  Hu says no way to revalution.  Any revaluation will be in accordance with domestic China interests.  As one of CPA’s board members said, Obama’s proper response is that any trade remedy we impose will also be in accordance with America’s domestic interests.

See full article below the fold.

Geithner is delayed the 4/15 report on potential currency manipulators, where Treasury has incomprehensibly never found currency manipulation for over 15 years.  That action was obviously a prelude to far more diplomacy.  Geitner met China’s vice premier Wang Qishan yesterday.  The agenda was not publicly disclosed, but we know currency…

Last weekend, Treasury Secretary Timothy Geithner delayed the Treasury report on whether China is a currency manipulator.  That indicated something was amiss.  Because the standard practices is to issue an April 15 report which says that no country’s manipulate currency.

Now Geithner is meeting with China’s vice premier, Wang Qishan, in China. 

President Hu Jintao will visit Washington April 12-13 for a nuclear security meeting, just before the April 15th deadline that Treasury later put off. Earlier this week, a Chinese agency appeared to warn exporters about protecting themselves, presumably from a revaluation of the renminbi.

Stephen Green, an economist in the Shanghai office of Standard Chartered, said… that there was virtually no chance that China would announce a move during or immediately after the treasury secretary’s visit. “The game plan is to move gradually to more flexibility in the second quarter,” he said.

The currency issue is all over the map.  The Administration has placed a very high priority on it.  But they simply won’t act unilaterally with countervailing duties and antidumping duties like those proposed in the widely supported HR 2378. Geithner is delaying the 4/15/10 currency manipulation report to Congress.  See…

NPR had a story on currency today.  I’ve embedded the program here.  Quite a good explanation on how the Chinese government fixes the price.  For the guy on the street.

This in the NY Times today. For now, the United States is setting aside potentially the most divisive issue in the relationship, deferring a decision on whether to accuse China of manipulating its currency, the renminbi, until well after Mr. Hu’s visit, according to a senior administration official. That decision,…

Several Senators sent a letter to Treasury Secretary Tim Geithner today.  They advocated that Treasury determine China to be a currency manipulator in the upcoming April 15 report.  The full letter is here.  Senators signing include: Casey (D-PA), Stabenow (D-MI), Levin (D-MI), Feingold (D-WI), Snowe (R-ME) and Collins (R-ME).