'No Currency Manipulation' Prompts Frustrated Response From U.S. Coalition

The U.S. Department of the Treasury received a resounding "bah humbug" from the China Currency Coalition today in response to the Department's "not guilty" verdict on whether China manipulates its currency.

The semi-annual, Congressionally-mandated report on global exchange rate policies stopped way short of charging China with currency manipulation, instead noting that Chinese currency reforms so far have been "considerable." David A. Hartquist, counsel to the coalition, queried, "How many more years do American manufacturers, agriculture and workers have to compete against a subsidized currency that is undervalued by as much as 40%? We need concrete action from the U.S. government to remedy this unfair and threatening situation."

The coalition asserts that China's continued maintenance of an undervalued exchange rate that does not reflect market conditions unlawfully bolsters the Chinese economy at the expense of U.S. industry and production. Exports from the U.S. to China and third countries have been stifled, even as "Made in China" goods have inundated the American and third-country markets.

China's undervalued exchange rate has continued to accelerate the U.S. trade deficit with China. The United States and China share the most imbalanced bilateral trade relationship in history. In 2005, the United States imported more goods from China than it exported -- to the tune of $203 billion dollars -- and this number will likely be exceeded in 2006. All told, China alone accounts for nearly 28% of the United States' $725.8 billion trade deficit.

The China Currency Coalition is an alliance of industry, agriculture, and worker organizations whose mission is to support U.S. manufacturing by seeking an end to Chinese currency undervaluation. AFL-CIO Secretary-Treasurer Richard L. Trumka and Doug Bartlett, Chairman of Bartlett Manufacturing Company, Inc., in Cary, Illinois, serve as co-chairs of the coalition. David A. Hartquist is a Partner at Kelley Drye Collier Shannon in Washington, D.C. and Chairman of the firm's International Trade and Customs Practice Group.