Senate May Force Obama to Take Tougher Yuan Stance
Business Week – March 17 (Bloomberg) — The latest push by U.S. lawmakers to target China’s currency policy may force President Barack Obama to take a stronger stance against how the yuan is valued, senators and analysts said.
Five senators including Charles Schumer of New York and Lindsey Graham of South Carolina introduced legislation yesterday to make it easier for the U.S. to declare currency misalignments and take corrective action. Even if the bill stalls, it may have “ripple effects” that lead the Treasury Department to declare China a currency manipulator, William Reinsch, president of the National Foreign Trade Council, said.
“I don’t have the sense that the congressional plan here is to legislate,” Reinsch said in an interview. “But addressing the issue is a high priority in Congress.”
Obama’s goal of doubling U.S. exports in five years depends on his ability to get China to raise the value of its currency, said Sherrod Brown, an Ohio Democrat and co-author of the legislation. China’s intervention in currency markets to keep the value of the yuan, or renminbi, at a set value acts as a subsidy to exports and tax on imports, Brown said at a news conference yesterday.
“There is growing exasperation with China,” C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington, said in an interview. “Now that the United States is committed to relying more on exports and less on borrowing, this issue is even more important.”
