The Coalition for a Prosperous America (CPA) strongly praised the Trump administration for formally China as a “currency manipulator.” U.S. manufacturers have long complained about Beijing’s currency manipulation, which has made Chinese exports artificially cheap in the U.S. market. This is the first time that the executive branch has taken such action.
Currency misalignment caused by an overvalued and noncompetitive dollar is the primary reason for continuing U.S. trade deficits. It has cost America millions of manufacturing jobs in the past two decades and has driven down agricultural prices. The People’s Bank of China recently raised the yuan’s trading range above 7 to 1 against the dollar. This continuing manipulation simply pushes the dollar higher in relation to the yuan. President Trump should now use his authority to counter-intervene against the People’s Bank, and he should start managing the capital inflows that continually drive the dollar higher. He should also put the full force of his administration behind the passage of the sponsored by Senators Tammy Baldwin and Josh Hawley. [more...]