By Ian Swanson - 07/08/10 09:23 PM EDT
Treasury made the announcement in a sensitive report to Congress that had been delayed in April to give China more time to adjust the value of its currency. Lawmakers and business groups argue China keeps the value of its currency artificially low to reduce the price of its exports at the expense of U.S. jobs.
In June, China announced it would no longer peg its currency to the dollar and would allow its exchange rate to appreciate in response to market forces, something Treasury described Thursday as “a significant step.”
“We will closely and regularly monitor the appreciation of the renminbi 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.”
The renminbi has edged up in value since the announcement, as the dollar has moved from 6.83 renminbi to 6.77 on Thursday. But critics say it is undervalued by as much as 40 percent.
"Claiming China doesn't manipulate its currency makes about as much sense as saying LeBron James doesn't play basketball," said Scott Paul, executive director of the Alliance for American Manufacturing
Sen. Charles Schumer (D-N.Y.), who blasted the report in a statement, has repeatedly promised to push legislation on the Senate floor that eventually could lead to higher U.S. tariffs on Chinese imports. Schumer’s legislation would allow the U.S. to consider currency values in assessing anti-subsidy duties.
report is as disappointing as it is unsurprising,” Schumer said Thursday in a statement.
“It’s clear it will take an act of Congress to do the obvious and call China
out for its currency manipulation.”
The Obama administration has pled with Schumer to hold back on his legislation.
Treasury has never found that China has manipulated its currency in the semi-annual reports to Congress, despite the insistence of Schumer and others that China has long-manipulated its currency.
The U.S. trade deficit with China was $71 billion for the first four months of 2010.
China this week said it had ruled out dumping its holdings of U.S. debt, which was seen as a sign of its confidence in the dollar.
This story was updated at 6:31 p.m.