U.S. Treasury Dept. fails to designate China as a currency manipulator.
In the months leading up to the release of the report, AFS and its members sent nearly 100 letters to the Treasury Department, asking that it cite China for its illegal currency practices in an effort to level the playing field of the international casting industry. The letters contained concrete examples from metalcasting plant owners and executives detailing the impact China's currency practices have had on the U.S. metalcasting industry.
However, despite claiming that "far too little progress has been made in introducing exchange rate flexibility for the renminbi," the department's report says that "the Treasury Department is unable to determine, from the evidence at hand, that China's foreign exchange system was operated ... for the purpose of ... gaining China an unfair competitive advantage in international trade."
This comes as both a surprise and a disappointment to those in the metalcasting industry. The effect that China's currency practices have had on the U.S. metalcasting industry has been devastating. For the last decade, the Chinese yuan has been pegged to the U.S. dollar and been undervalued by as much as 40%. This allowed Chinese metalcasters to easily outbid and outsell U.S. suppliers, costing the U.S. industry thousands of jobs and hundreds of plants in the past 10 years.
AFS members reported that in Pennsylvania alone, more than 20 plants have shut their doors in the past five years due to China's ability to outbid and outsell U.S. metalcasters.
For more information on AFS trade issues, contact Stephanie Salmon at the AFS Washington Office, 202/842-4864 or firstname.lastname@example.org.
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|Title Annotation:||WASHINGTON ALERT|
|Date:||Jun 1, 2006|
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