PITTSBURGH - China''s alleged currency manipulation has long stuck in the craw of North American steelmakers, who once again are stepping up efforts to have Congress address the issue.
Thomas J. Gibson, president and chief executive officer of the American Iron and Steel Institute (AISI), is urging House members to back a letter to cabinet officials asking them to respond to the apparent currency manipulation and to pursue comprehensive policies protecting American businesses from unfair trade.
U.S. Reps. Mike Michaud (D., Maine) and Tim Ryan (D., Ohio) are circulating the letter to U.S. Treasury Secretary Tim Geithner and Commerce Secretary Gary Locke, insisting that they use the resources and authority of their respective departments to respond to what is termed "China''s unfair RMB devaluation."
"Failure to do so will impede our economic recovery and impair the ability of American businesses to increase their producti on, keep their doors open and create jobs," Gibson said in a "SteelGram" to members of the House Steel Caucus and House staff assigned to steel issues.
The letter, which contains 113 co-signers, states that China''s maintaining its currency at a devalued exchange rate provides a subsidy to that country''s companies and unfairly disadvantages foreign competitors. It points out that between January 2000 and May 2009, China''s share of the U.S. trade deficit for non-oil goods grew to 83 percent from 26 percent, growth the letter calls "an untenable pattern for American manufacturers."
China''s alleged exchange rate misalignment also threatens the stability of the global financial system by contributing to rampant Chinese inflation and accumulation of foreign reserves, it added.
The letter urges Commerce to apply U.S. countervailing duty laws in defense of American companies who have been hit with losses thanks to the purported currency m anipulation, and asks Treasury to include China in its biannual report on currency manipulation. It is noted that Treasury hasn''t identified China as a country that manipulates its currency since 1994 under the terms of the Omnibus Trade and Competitiveness Act of 1988.
"But Secretary Geithner''s testimony to the Senate acknowledging that fact surely justifies the inclusion of China in the report," the letter states. "After labeling the country as a currency manipulator, Treasury should enter into negotiations with China regarding its foreign exchange regime. These combined actions will signal the government''s willingness to take decisive action against China''s currency manipulation, including the potential filing of a formal complaint with the World Trade Organization."
The letter calls for those actions to be taken in concert with intense diplomatic efforts with China, the International Monetary Fund and multilaterally with other countries."Through a combined strategy of legal action and international pressure, it is possible China will revisit its undervaluation of the RMB," the letter reads. "If these efforts are not successful, we ask the administration to consider all the tools at its disposal, including the application of a tariff on Chinese imports, to respond to China''s currency manipulation. The economic impact of the RMB undervaluation on American businesses and workers is too great for the administration not to pursue a comprehensive effort."