China and Currency Manipulation

China and Currency Manipulation

By exploiting world currency markets, countries like China and Japan effectively subsidize their exports to the United States, and place a tariff on U.S. shipments to them. This manipulation is taking place on a massive scale. By some estimates, China’s yuan is undervalued by as much as 40 percent compared with the U.S. dollar, and eliminating that artifical devaluation would lead to significant employment gains across America.

China’s currency manipulation has contributed to the dramatic increase in the U.S. bilateral trade deficit with China, which now tops $318 billion a year. China has amassed foreign exchange reserves of more than $3.8 trillion, far surpassing any other nation’s reserves.

China’s currency manipulation also attracts foreign investment into China and away from American manufacturing facilities. This flow of investment already has cost Americans billions of dollars in lost wages. When countries adopt artificial exchange rates not based on market forces, they not only exacerbate the U.S. trade imbalance, but they create global trade imbalances. Additionally, currency manipulation results in a sizeable difference in labor costs. This difference creates the illusion of a comparative advantage for a given country. Ultimately, currency manipulation is a subsidy that can put American manufacturers at an unfair disadvantage in the global marketplace.

Ending that subsidy, however, would create millions of jobs in every state.

@KeepitMadeinUSA on Twitter

  • "EU, Japan and the US are set to announce a new alliance to take on China more aggressively over trade issues such… https://t.co/H6JeXGudle 18 min 23 sec ago
  • Chinese imports are widening the trade gap, despite Trump's promises to cut the deficit. https://t.co/i32YUlXYDb 13 hours 55 min ago
  • "Think of [retraining] as learning for the sake of economic survival." https://t.co/BphKvJTCD2 15 hours 10 min ago
  • The U.S. isn't alone. Japan and the E.U. are calling for fair trade practices too. https://t.co/dD2H6GZw6G 15 hours 20 min ago
  • Report: The U.S. it has been the target of 38 separate decisions in WTO trade remedy disputes, five times more than… https://t.co/QPGFm0u90c 15 hours 45 min ago
  • China's trade data shows a healthy economy, but can we believe what we're reading? Even this Chinese paper points o… https://t.co/xZEvUOMxnu 16 hours 5 min ago
  • This American toy company has been making scooters for over 30 years. https://t.co/kzR61EX8P7 16 hours 45 min ago
  • "Despite the glowing free-trade rhetoric from Beijing, inside WTO negotiating rooms China is hardly a champion of f… https://t.co/OCb1IoKJ6I 17 hours 20 min ago
  • Looking for some #MadeinAmerica holiday gift ideas? We've got you covered. https://t.co/4YTyIpDY85 17 hours 40 min ago
  • "China’s overriding goal is, at the least, to defend its authoritarian system from attack and at most to export it… https://t.co/ifg9s0Jc5O 17 hours 50 min ago