China continues intervening in international currency markets and utilizing other strategies to keep their currency artificially low. Jacob Lew, our new Treasury Secretary, just met with newly appointed Chinese President Xi Jinping. The public reporting I’ve seen so far does not indicate that currency misalignment was discussed.
Has the Administration abandoned the pretense of pushing the Chinese to revalue their currency? Bush II and Hank Paulson engaged the Chinese in the fruitless “Strategic Economic Dialogue” on this point. Obama and Geithner continued it.
While negotiations without leverage have failed, we certainly don’t want an even lower Administration priority for the issue. This highlights the need for legislation to neutralize foreign currency cheating which makes our exports more expensive and makes imports artificially cheap… currency of foreign government policies.
Congressmen Sander Levin, Tim Murphy, Tim Ryan and Mo Brooks are filing the Currency Reform for Fair Trade Act today. It is the same bill as last year. We need to push for passage.
Currency cheating is a violation of international law. But there is no remedy. It’s as if theft was declared illegal, but there was no mechanism to penalize thieves. The Currency Reform for Fair Trade Act would provide a remedy.