The China Currency Coalition, reacting to yesterday’s U.S. government trade data announcement, charged that China’s manipulation of its currency is the most egregious protectionist trade policy of any nation.
Coalition spokesman David A. Hartquist said, “By undervaluing the yuan, China provides a back-door subsidy of at least 40% for its exports, while taxing U.S. exporters by an equivalent charge. China has erected a wall of protection that dwarfs the Great Wall. U.S. manufacturers cannot compete against those barriers.”
The bilateral gap with China is greater than with all other U.S. trading partners. According to the latest Department of Commerce statistics, the U.S. trade deficit with China reached $17.9 million in January 2006, a 17% increase over the previous month, and a 56% increase over January 2005.
In a related story, manufacturing job growth continued to suffer from the trade distortions. While total job growth reached 243,000 in February, manufacturing jobs declined by 1,000. Employment in the manufacturing sector remains almost three million below the levels in February 2001.
