China has elected to play a game of chicken with members of Congress on the issue of revaluing the yuan. Several members of the House and Senate have told the Administration that if it will not press China to adjust the value of the Chinese currency in a way that would prevent it from sending cheap exports to the US, that it may pass a law mandating trade sanctions.
The Treasury passed up a chance to label China as a currency manipulator on April 15, instead electing to solve the matter through negotiations which have gone nowhere.China’s exports were up 50% in May, which has angered some members of Congress, especially those seeking to remain in office in the midterm elections. China’s yuan value may have cost American jobs making it a convenient platform as a reelection issue.
China’s news agency has reported that official in the country attacked US legislators, arguing that “Some members of the U.S. congress are playing a dangerous game by manipulating the Chinese yuan debate for domestic political gains.”
The comments are likely to make the standoff worse. and give Congress another weapon its fight.
Douglas A. McIntyre
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