Other countries manipulate currency in response to China
October 5, 2010 Leave a comment
Japan and Brazil are manipulating their currencies in response to China’s tactics, rather than taking the countervailing duty approach of the recent House passed bill HR 2387.
Japan and Brazil have taken measures recently to devalue their currencies, or at least prevent them from appreciating further against the Chinese currency, the renminbi.
The House passed bill would allow countervailing duties against any country that manipulates currency, not just China. A good approach to neutralize the export subsidy advantage they try to achieve through cheating.
There is reference, in that linked article, to the fact that the U.S., under Reagan, has acted before against currency manipulation.
Of course, many countries have manipulated their currencies before — the United States reached a political accord with Japan in the Reagan administration to do exactly that, in an effort to reduce a yawning trade deficit.
The paragraph says there was an “effort to reduce” the trade deficit. It does not say that the effort succeeded. We balanced trade again by around 1990. Very direct and substantial cause and effect.
That forced/negotiated revaluation was 90% as to the Japanese yen. 90%. A big number.