Umm… So What About That Currency Report Due This Month?

Cathalijne Adams

Cathalijne Adams Researcher/Writer, AAM

The Treasury Department’s semiannual Exchange Rate Policies report is now more than a week overdue. But then again President Trump is almost three years overdue in labeling China as a currency manipulator -- something he promised to announce on his first day in office.

True, it’s unlikely that this month’s report would name China a currency manipulator since October’s report didn’t either. Nonetheless, an examination of the country’s currency practices could help bolster the Trump administration’s bargaining position as it prepares to continue trade talks with China next week.

Though both countries have reportedly already settled penalties to deter currency manipulationin the pending trade deal, the Chinese renminbi’s value has been in decline in relation to the U.S. dollar as trade talks have heated up. China could easily further undervalue its currency to blunt the impact of tariffs – particularly as economic pressures continue to build.

But why does currency manipulation matter? It’s yet another method by which Beijing has gamed the international trade system, artificially lowering the cost of its exports and thereby gaining unfair competitive advantage. This method along with its other trade cheating practices, such as industrial subsidies, forced technology transfers, and intellectual property theft, have won China the lion’s share of manufacturing while undercutting manufacturing in the United States.

So, where’s that report?

Meanwhile, U.S. Trade Representative (USTR) Robert Lighthizer has shown that he at least is as motivated as ever to put an end to China’s trade cheating, continuing China’s 15-year run on the intellectual property (IP) Priority Watch List in a Special 301 report released Thursday. In the report, Lighthizer warns that China along with the other countries included on the Watch List that failure to address these IP concerns may result in tariffs.

It’s well past time for China to follow through on its reform promises, as the report notes:

“High-profile statements in support of IP and innovation by Chinese government officials are no substitute for real structural changes to address shortcomings in China’s IP system, which cannot be excused by the country’s stage of economic development. The United States, other countries, and the private sector continue to urge China to embrace meaningful and deep reform to its IP-related legal and regulatory framework. The results to date have represented missed opportunities to address priority concerns of the United States and others, including where China’s proposed revisions to legal and regulatory measures fail to adopt U.S. recommendations for reform.”

Now it’s the Treasury Department’s turn to offer China another healthy dose of trade reality.

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Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

Union Matters

America’s Wealthy: Ever Eager to Pay Their Taxes!

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Why do many of the wealthiest people in America oppose a “wealth tax,” an annual levy on grand fortune? Could their distaste reflect a simple reluctance to pay their fair tax share? Oh no, JPMorganChase CEO Jamie Dimon recently told the Business Roundtable: “I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that.” Could Dimon have in mind the interest group he knows best, Wall Street? In the 2008 financial crisis, federal bailouts kept the banking industry from imploding. JPMorgan alone, notes the ProPublica Bailout Tracker, collected $25 billion worth of federal largesse, an act of generosity that’s helped Dimon lock down a $1.5-billion personal fortune. Under the Elizabeth Warren wealth tax plan, Dimon would pay an annual 3 percent tax on that much net worth. Fortunes between $1 billion and $2.5 billion would face a 5 percent annual tax under the Bernie Sanders plan.

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No Such Thing as Good Greed

No Such Thing as Good Greed