US President Barack Obama’s administration announced on Friday it will delay a scheduled report on whether China is manipulating its currency to gain trade advantages until after upcoming meetings with world leaders next month.
Instead of putting out a report, the US Treasury Department issued a statement praising China for letting the yuan appreciate by roughly 3 percent since June 19. The administration also announced an investigation into unrelated trade policies that union leaders complain have allowed Chinese businesses to gain advantages in the clean energy market.
The dual effort suggests careful diplomacy. It gives China more time to show it’s serious about responding to critics who say it has undervalued its currency to gain a step up in a weak global economy.
It also allows Obama to show US manufacturers, labor unions and lawmakers that he is getting tough with China ahead of the Nov. 2 midterm elections — without labeling Beijing a currency manipulator.
Chinese Vice Premier Wang -Qishan (王岐山) spoke by phone with US Treasury Secretar Timothy Geithner on Friday “to exchange opinions on issues concerning China-US economic relations,” the state-run Xinhua news agency said late on Friday in a one-sentence report with no details of their conversation.
There was no immediate official response from China to the delay of the currency report.
The yuan has been rising by about 1 percent per month since the start of last month, a pace that the Treasury statement endorsed.
“If sustained over time, this would help correct what the IMF has concluded is a significantly undervalued currency,” the Treasury statement said.
US manufacturers believe China’s currency is undervalued by as much as 40 percent, making US goods more expensive in China and Chinese goods cheaper and thus more competitive in the US market.
Frank Vargo, vice president for international affairs at the National Association of Manufacturers, said his group would like to see a much more rapid appreciation of China’s currency than 1 percent per month. He said one of the dangers is that after the upcoming meetings, China could revert to little or no further currency appreciation.
“The heat is on until the meetings, but the question is what will China do after the meetings,” Vargo said.
The administration announced the delay hours after saying it was launching an investigation into Chinese trade practices that could keep US workers from gaining high-paying green jobs.
US Trade Representative Ron Kirk announced that the government would look into the United Steelworkers complaint that Chinese businesses are able to sell wind and solar equipment on the international market at a cheaper price because they receive subsidies from the Chinese government. The union said the subsidies are prohibited by global trade rules.
US Senator Charles Schumer, a vocal critic of China’s trade practices, welcomed the trade case, but said he was disappointed the administration did not issue a report citing China as a currency manipulator.
“An investigation into China’s illegal subsidies for clean energy industry is overdue, but it’s no substitute for dealing with China’s currency manipulation,” Schumer said in a statement.
Gary Hufbauer, a trade expert at the Institute for International Economics, said that the administration is hoping that deciding to launch an investigation on China’s subsidies for environmental technologies would provide the “red meat” that Democratic candidates can take to the voters in coming weeks.
“It might have been better politically to do both the currency and the trade case, but this is probably enough for right now,” Hufbauer said.
The administration could bring a case against China before the WTO, if it finds the allegations by the Steelworkers to be true. If the WTO found in the US’ favor, it would clear the way for the US to impose penalty sanctions on Chinese imports unless the Chinese government halted the practices.
Schumer is not waiting for that ruling. He vowed to push ahead with his legislation that would impose sanctions on Chinese products unless China moves more quickly to let its currency rise in value against the dollar. The House by an overwhelming margin passed similar legislation last month.
Lawmakers and the Obama administration have taken a tougher approach to China on the currency issue in recent weeks in advance of elections with high US unemployment and the weak economic recovery expected to be big issues on the minds of voters.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS