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WASHINGTON, DC – U.S. Rep. Michael Arcuri (NY-24) issued a statement last week after U.S. Department of the Treasury Secretary Timothy Geithner delayed the release of a determination on Chinese currency manipulation.  Arcuri believes it is critical for Geithner to issue the report and address the issue of Chinese currency manipulation as quickly as possible in order to protect local manufacturing jobs.

“Secretary Geithner’s recent announcement that the Treasury Department has delayed making a determination on Chinese currency manipulation is completely unacceptable and needs immediate corrective action,” Arcuri said.  “Without action we face the possibility of losing thousands of fair-wage manufacturing jobs.  In my district alone, thousands of manufacturing jobs locally need to be protected so we must address unfair trade practices being utilized by countries like China. Our manufacturers are not asking for any unfair advantage, they are just seeking a level playing field so that they can fairly compete internationally.”

On March 15, 2010, Arcuri sent a letter to U.S. Department of the Treasury Secretary Timothy Geithner and U.S. Department of Commerce Secretary Gary Locke expressing concern over China’s ongoing manipulation of its currency and outlined actions necessary to restore fair trade save U.S. manufacturing jobs including the inclusion of China in the Department’s bi-annual report on currency manipulation.

The manipulation of the Chinese currency occurs because China pegs its currency, the renminbi (RMB), to the U.S. dollar at a fixed exchange rate.  Economists estimate that this exchange rate undervalues the RMB anywhere between 15% and 40%.  Maintaining its currency at a devalued exchange rate effectively provides a subsidy to Chinese companies and unfairly disadvantages foreign competitors.  U.S. exports to the country cannot compete with the low-priced Chinese equivalents, and domestic American producers are similarly disadvantaged in the face of subsidized Chinese imports.

The devaluation of the RMB also exacerbates the already severe U.S-China trade deficit.  Statistics show that between January 2000 and May 2009, China’s share of the U.S. trade deficit for non-oil goods grew from 26% to 83% -- an untenable pattern for American manufacturers.  And finally, China’s exchange-rate misalignment threatens the stability of the global financial system by contributing to rampant Chinese inflation and accumulation of foreign reserves.

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