photo: KrisNFred via Flickr
As predicted by China’s warming to American foreign policy initiatives, the Treasury Department delayed an April 15 report that could have labeled China a currency manipulator. Timothy Geithner, who made the announcement on Saturday, tried to straddle the fence by vowing to press further for China to allow the renminbi to appreciate.
However, Geithner also tried to soothe angry U.S. lawmakers by saying he will use upcoming meetings of the Group of 20 and a U.S.-China economic summit in Beijing in May to try to get China to move.
“I believe these meetings are the best avenue for advancing U.S. interests at this time,” Geithner said in a statement issued at midday on the Easter holiday weekend.
Treasury gave no indication when it will actually release the report.
Nice dry wit from CNBC there. “Midday on the Easter holiday weekend” indeed.
Manufacturing interests and labor unions will be disappointed with the move. They blame China’s currency manipulation for the loss of millions of US jobs and an impossibility to compete on a level playing field.
In his statement, Geithner appeared to agree with this, saying that “China’s inflexible exchange rate has made it difficult for other emerging-market economies to let their currencies appreciate” and “A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing.”
I wouldn’t expect this to stop lawmakers pushing for China to un-peg their currency from the dollar. Chuck Schumer and Lindsey Graham said they would seek a vote on their legislation offering penalties for China’s “currency misalignment” in the coming months.
