What we do not need is a trade war, yet this is what we may get if the Senate votes in the next two weeks on the Schumer bill to require Treasury to determine if the yuan is misaligned. The Senate would attach this measure to a small business lending bill. It would also allow companies to seek import duties if they ave been hard by China trade. This is similar to a 2007 bill.
Treasury never reported in the Spring on whether China has been a currency manipulator. It was expected that China would raise the value of the yuan given the Treasury backed-off its study. Market conditions have changed to environment for China. The currency markets have been volatile and China does not have a desire to raise the yuan value when the dollar is appreciating. This bill could be disruptive to international trade.
Treasury never reported in the Spring on whether China has been a currency manipulator. It was expected that China would raise the value of the yuan given the Treasury backed-off its study. Market conditions have changed to environment for China. The currency markets have been volatile and China does not have a desire to raise the yuan value when the dollar is appreciating. This bill could be disruptive to international trade.
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