The U.S. declined on Wednesday to cite China for manipulating its currency for unfair trade advantages. That finding came despite pressure in Congress for penalties because of the growing U.S. trade deficit with China. The trade gap is expected to hit an all-time high above $250 billion this year. The imbalance has been blamed as contributing to loss of 3 million manufacturing jobs in the United States since 2000.
The Bush administration told Congress the recent “moderate acceleration” in the rise of the value of China’s currency, the yuan, versus the dollar was welcome but “still insufficient.” But the administration’s report, required twice a year, said China did not meet the requirements in U.S. law to be designated a currency manipulator. Members of Congress who support legislation that would penalize Chinese imports were not happy. They said it has been clear for years that China is manipulating its currency to gain a trade advantage. [Full Text]