The U.S. Treasury report issued yesterday designating the Chinese currency as undervalued is a small step in the right direction.
The undervalued yuan, also called renminbi, artificially depresses the cost of Chinese products and falsely increases the price of American goods. The resulting lopsided trade has closed American factories and cost American jobs.
“The administration is correct in calling the renminbi undervalued,” said Leo W. Gerard, international president of the United Steelworkers (USW) union. “The next crucial step is to do something about it,” he added. The USW supports legislation that would punish China for currency manipulation sponsored in the Senate by Sen. Chuck Schumer, D-N.Y., and others and in the House by U.S. Rep. Tim Ryan D-Ohio and others.
China undervalues its currency by using renminbi to buy dollars. China now holds $2.4 trillion in U.S. currency. Even conservative economists agree that the renminbi is undervalued as a result by between 25 and 40 percent against the dollar ... more