Umm… So What About That Currency Report Due This Month?

Cathalijne Adams

Cathalijne Adams Researcher/Writer, AAM

The Treasury Department’s semiannual Exchange Rate Policies report is now more than a week overdue. But then again President Trump is almost three years overdue in labeling China as a currency manipulator -- something he promised to announce on his first day in office.

True, it’s unlikely that this month’s report would name China a currency manipulator since October’s report didn’t either. Nonetheless, an examination of the country’s currency practices could help bolster the Trump administration’s bargaining position as it prepares to continue trade talks with China next week.

Though both countries have reportedly already settled penalties to deter currency manipulationin the pending trade deal, the Chinese renminbi’s value has been in decline in relation to the U.S. dollar as trade talks have heated up. China could easily further undervalue its currency to blunt the impact of tariffs – particularly as economic pressures continue to build.

But why does currency manipulation matter? It’s yet another method by which Beijing has gamed the international trade system, artificially lowering the cost of its exports and thereby gaining unfair competitive advantage. This method along with its other trade cheating practices, such as industrial subsidies, forced technology transfers, and intellectual property theft, have won China the lion’s share of manufacturing while undercutting manufacturing in the United States.

So, where’s that report?

Meanwhile, U.S. Trade Representative (USTR) Robert Lighthizer has shown that he at least is as motivated as ever to put an end to China’s trade cheating, continuing China’s 15-year run on the intellectual property (IP) Priority Watch List in a Special 301 report released Thursday. In the report, Lighthizer warns that China along with the other countries included on the Watch List that failure to address these IP concerns may result in tariffs.

It’s well past time for China to follow through on its reform promises, as the report notes:

“High-profile statements in support of IP and innovation by Chinese government officials are no substitute for real structural changes to address shortcomings in China’s IP system, which cannot be excused by the country’s stage of economic development. The United States, other countries, and the private sector continue to urge China to embrace meaningful and deep reform to its IP-related legal and regulatory framework. The results to date have represented missed opportunities to address priority concerns of the United States and others, including where China’s proposed revisions to legal and regulatory measures fail to adopt U.S. recommendations for reform.”

Now it’s the Treasury Department’s turn to offer China another healthy dose of trade reality.

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Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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A Friendly Reminder

A Friendly Reminder