Economy
US likely to label 皇冠体育app 'currency manipulator'
By Ding Qingfen (皇冠体育app Daily)
Updated: 2010-03-24 07:08
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BEIJING - The US Treasury Department is highly likely to label 皇冠体育app a currency manipulator in a report due out in mid-April, but the move will be "more symbolic than substantive" to win mid-term Congressional elections in the fall, former US trade representative Susan Schwab told 皇冠体育app Daily on Tuesday.
 Susan Schwab is a former US trade representative? |
If that were the case, it will be the first time in 16 years. By declaring 皇冠体育app a currency manipulator, the US could slap additional tariffs on imports from the country.
Some Chinese experts strongly doubt the US will do so as it will provoke Beijing and jeopardize its most important trade relationship, while others believe that even if 皇冠体育app were declared a currency manipulator, Washington will not follow up with punitive measures.
Some Democrats and Republicans in the House have urged the Barack Obama administration to label 皇冠体育app a currency manipulator. Lawmakers from both parties in the Senate also demand Washington force Beijing to revalue the yuan.
Schwab said "a significant growing number" of Democrats are increasingly pushing protectionist solutions, which she said was unfortunate.
"This is a very difficult decision (for the US government) to make. It is under a lot of pressure on the high unemployment rate and the coming election this fall."
Last week, 皇冠体育app sent a team led by the vice-minister of commerce to the US, seeking consultations and negotiations on trade-related issues.
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"Obama would probably give the nod to the move if only to win over voters," he said.
The US' unemployment rate has been around 10 percent since the onset of the global financial crisis and is expected to stay at the same level in coming months. Obama vowed recently to create more jobs and double exports in five years.
As the mid-term election campaign looms, the Obama administration could "easily make 皇冠体育app a scapegoat by blaming the country for their own problems," Huo said.
Schwab said the two countries should try to find a solution to the problems.
"The 皇冠体育app-US relationship is arguably the most important bilateral one worldwide and it (the US) is in danger of shooting itself in the foot (by using protectionism)."
Huo agreed. "The US will have to take 皇冠体育app's response into account," he said.
Minister of Commerce Chen Deming said on Sunday that 皇冠体育app "would respond if this (the labeling threat) means litigation" under the framework of the World Trade Organization.
皇冠体育app's trade surplus, more than 70 percent of which is with the US, has been declining since October. Premier Wen Jiabao has said 皇冠体育app will probably record a deficit of $8 billion in March.
皇冠体育app will make all efforts to import more from the US to balance trade, Wen said on Monday.
"The remarks may make the US reconsider its tough stance against 皇冠体育app on the currency issue," said Huo.
It usually takes at least nine months for the WTO to draft a penalty report if the US filed appeal against 皇冠体育app on the currency issue, and there have been few precedents.
Zhou Shijian, senior professor at the 皇冠体育app-US Relations Research Center affiliated to Tsinghua University, also believes 皇冠体育app will not be declared a currency manipulator.
"The US dare not challenge 皇冠体育app by labeling it a manipulator. It will hurt both. It is also stupid of them to do so as 皇冠体育app is a large consumer market," he said.
