Trump's U-turn on Chinese currency stance a step in the right direction
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It must be Groundhog Day in Washington, D.C. because our heads just popped up after a very long (and brutal) campaign season, as President Trump suddenly declared that China is not going to be labeled a currency manipulator. That’s right, in case you haven’t heard, China didn’t qualify for the Final Four! Their status will remain as non-manipulative.

The Treasury Department uses three criteria to determine whether a country is manipulating its currency. These are specific rules that were established long ago by Congress. China only hit on one count, so they remain excluded from a club that they didn’t want to belong to in the first place.

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In addition, the dollar continues to get stronger and the renminbi has receded. So, we now have the awkward situation where President Trump is following the letter of the law, while Senate Minority Leader Chuck SchumerChuck SchumerCoronavirus talks on life support as parties dig in, pass blame Senate Democrats push to include free phone calls for incarcerated people in next relief package Trump backs plan to give airlines another billion in aid MORE (D-N.Y.) and the AFL-CIO are left fuming in the wings.

 

This all goes back to the adage that appears every baseball season with “say it ain’t so, Joe.”  Sometimes, we just don’t want to hear the truth but, in fact, by our own rule of law, China does not manipulate their currency.

Add to this the fact that China holds 28 percent of our foreign debt and 10 percent of our overall debt, and you easily conclude that it’s probably not a good idea to spark a schoolyard fight with China over a claim that just isn’t so.

President Trump’s big issue with China is our trade deficit — we import four times more than we export. If America can find a way to balance our China trade by breaking down barriers to entering the Chinese market, then we will do amazingly well for our exporters, while not hurting our importers.

That’s just good business sense, and seems to be where the administration is headed. With 319 million people in America and 1.39 billion people in China, creating a competitive market to sell our goods is vastly more appealing than arguing over currency manipulation.

Nobody likes a sea of uncertainty, so normal progressions with nominal change is clearly the better route. These calming attributes reflect a new-found path that is highly appealing to the financial and business communities.

 

Rick Helfenbein is president and CEO of the American Apparel & Footwear Association and is a strong advocate for a robust U.S. trade agenda and for “Made in USA.” He lectures frequently on the subjects of politics and international trade. Follow him on Twitter @rhelfen.


The views expressed by contributors are their own and not the views of The Hill.