The White House declined to designate China as a currency manipulator on Tuesday, saying that the country has allowed the yuan to rise almost 10 percent against the dollar since 2010 though the currency remains “significantly undervalued.”
The refusal to make the designation was revealed in a Treasury report on whether other nations are manipulating currencies to gain trade advantages. U.S. manufacturers maintain that China is manipulating its currency to gain an advantage over American firms because a weaker yuan makes Chinese goods more affordable for Americans and less affordable for Chinese consumers, Fox News reports.
Former Republican presidential hopeful Mitt Romney vowed during the 2012 campaign to designate China as a currency manipulator. The Obama administration, however, said that such a brand could risk retaliation against American exporters.
The U.S. has not named any nation a currency manipulator since 1994 when President Clinton made the accusation against China. Both parties, however, concluded that negotiation rather than confrontation is necessary to reduce America’s trade gap with China, according to Fox News.
While such a designation could increase the tariff on Chinese goods imported into the U.S., the extra taxes could also initiate a trade war with one of the fastest-growing U.S. export markets.adult water slide
“This report all but admits China’s currency is being manipulated by stops short of saying so explicitly,” Sen. Charles Schumer (D-N.Y.), a critic of China’s trade policies, said, Fox News reports. “It’s time for the Obama administration to rip off the Band-aid and force China to play by the same rules as all other nations.”
The U.S. Treasury said that the yuan remains substantially undervalued and vowed to pressure Beijing to allow the currency value to rise further to “level the playing field for American workers and businesses.” The U.S. trade deficit with China reached $29.1 billion in September.