WASHINGTON (Oct. 9, 2014) — The Alliance for American Manufacturing (AAM) has sent a letter to U.S. Treasury Secretary Jack Lew, urging him to designate China and Japan as currency manipulators in the Treasury Department's upcoming report to Congress on international economic and exchange rate policies.
In its last report, Treasury pointed to China making large purchases of foreign exchange, despite having $3.8 trillion in reserves, said AAM President Scott Paul in his Oct. 8 letter. Yet the Obama administration has not taken measures to identify China as a currency manipulator or take measures to stop China, he said.
“The situation has, if anything, grown worse over the last six months,” Mr. Paul wrote. “The dollar-yuan exchange rate is essentially the same as it was 17 months ago, and China's aggressive intervention has caused the yuan to fall 1.03 percent below its high-water mark in January 2014.
“China continues to amass major trade surpluses with the United States, reaching a single-month record in July 2014,” he wrote.
Japan too is guilty of currency distortions, according to Paul. “Government officials in Japan have publicly acknowledged efforts to weaken the yen, which has lost 30 percent of its value against the dollar over the past 18 months,” Mr. Paul said in his letter.
Currency manipulation contributes to persistently high trade deficits, which are the primary reason the U.S. has recovered only 31 percent of the manufacturing jobs it lost during the recession of 2008, according to Mr. Paul.
“It is essential for U.S. industry and workers—and Congress—to know that Treasury is willing to step forward to deter currency manipulation,” he wrote.