Geithner delays release of report on foreign currency manipulation

Treasury Secretary Timothy Geithner is delaying the release of a
report on foreign currency manipulation as some senators are calling
for the administration to pressure China to revalue the yuan to help
U.S. manufacturers.

Democrats and Republicans in Congress have increasingly complained
that China has kept the yuan at artificially low levels relative to the
dollar, hurting U.S. exports.

{mosads}The Treasury Department faced an April 15 deadline to release its
currency report. But Geithner said on Saturday that he wanted to wait
for a series of “high-level meetings” scheduled over the next three
months among leaders of G-20 nations to address currency issues.

Geithner indicated one goal would be to convince China to adopt a more “flexible”currency rate.

“A move by China to a more market-oriented exchange rate will make
an essential contribution to global rebalancing,” Geithner said in a
statement.

China pegs the yuan to the dollar and its currency rises and falls
with fluctuations in the dollar’s value. Critics say this means China’s
currency is undervalued, lowering the price of Chinese exports while
making U.S. exports to China more expensive.

Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) are
pushing for a May vote on legislation to name China as a currency
manipulator.

“At a time when so many U.S. jobs are at stake, we remain skeptical
about China’s willingness to do the right thing on its own,” Schumer
said in a statement on Friday.

A finding that China manipulates its currency would mean Treasury
would have to seek negotiations with the Chinese, though the Chinese
would be unlikely to reciprocate.

“The announced delay is for a definite period and for a
defined purpose,” Ways and Means Committee Chairman Sander Levin (D-Mich.) said in a statement Saturday. “It is to see if, in the next few months, the
international community will address the causes of major global imbalances,
including China’s substantial undervaluing of its currency, which hurts American
jobs and businesses. If the multilateral effort does not result in
China’s making significant changes, the Administration and Congress will
have no choice but to take appropriate action.”

Sen. Chuck
Grassley (R-Iowa), the ranking member of the Senate Finance Committee, also swiftly issued a statement.

“I’m disappointed that Secretary
Geithner is delaying publication of the Department’s exchange rate
report,” Grassley said. “Everyone knows China
is manipulating the value of its currency to gain an unfair advantage in
international trade. If we want the Chinese to take us seriously, we need to
be willing to say so in public. The past few years have proven that denying
the problem doesn’t solve anything. The Treasury Department should cite China
as a currency manipulator.  I renew my call for the Administration to prepare a
WTO case against China
under Article XV of the General Agreement on Tariffs and Trade.”

This story was updated at 1:30 p.m.