WASHINGTON — The Treasury Department declined to name China a currency manipulator on Thursday in its biannual report on foreign exchange rates.
China said last month it would move toward a more flexible exchange rate for the yuan, following months of increasing tensions with the U.S. over its currency policies. The exchange rate report was originally due to be released in April, but the Treasury Department delayed it for three months to allow for diplomatic engagement between the two countries at the G-20 meeting in Toronto last month and the Strategic and Economic Dialog in May.
“What matters is how far and how fast the renminbi [yuan] appreciates,” said Treasury Secretary Timothy Geithner on Thursday. “We will closely and regularly monitor the appreciation of the renminbi [yuan] and will continue to work towards expanded U.S. export opportunities in China that support employment in the United States, in close consultation with Congress.”
Critics charge the yuan is undervalued by as much as 40 percent, which makes China’s exports cheaper and puts U.S. produced goods at a competitive disadvantage. U.S. textile producers have long called for China to allow the yuan to appreciate, arguing that it gives Chinese producers an unfair advantage. U.S. lawmakers have also pressured China to address currency concerns by calling for punitive action. Sen. Charles Schumer (D., N.Y.) has said he will move legislation imposing punitive tariffs on imports from countries that are found to be manipulating their currency by not allowing it to appreciate.