Treasury Passing the Buck on China
Mr. Hu’s visit will take place only two days before the Obama administration faces a deadline to decide whether to label
a “currency manipulator,” meaning that it intervenes in currency markets to gives its exporters an artificial advantage. Pressure in the China has been building to take that step, which could initiate a Congressional process that would lead to slapping tariffs on Chinese imports. United States
But given the potential for embarrassing Mr. Hu — and for sending bilateral relations into another tailspin — the administration decided not to report on April 15, one of the deadlines set by Congress and the Treasury Department to issue a report on possible currency manipulation.
To avoid embarrassing Mr. Hu, the Treasury Department could delay the deadline for weeks. “As a practical matter, they’ve got a lot of wiggle room,” said Nicholas R. Lardy, an economist at the Peterson Institute for International Economics in
. Mr. Lardy added that he thought it was unlikely that Washington Chinawould have agreed to a visit by Mr. Hu unless there was at least an informal assurance by the Treasury that would not immediately be named a currency manipulator. China
Last Wednesday the House Ways & Means Committee held a hearing on Chinese currency policy in an effort to pressure the
administration to designate
Last week Senator Schumer said that, regardless of what the Treasury Department decides to do in its mid-April report, he would push for a vote on a bill that would completely overhaul the process for making determinations on currency manipulation so that it would be easier and quicker to take action on China and other countries. Given that Treasury may decide to miss the deadline altogether, Schumer’s strategy now seems pretty shrewd.