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U.S. plans on getting tough with China
U.S. Treasury Secretary Timothy Geithner pauses as he testifies during a hearing before the Senate Banking Committe on Capitol Hill in Washington, D.C.
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TEXT OF INTERVIEW
STEVE CHIOTAKIS: Treasury Secretary Tim Geithner is signaling the Obama administration plans to go toe-to-toe with China over its currency. U.S. businesses say China is keeping its currency too low, giving it an unfair trade advantage. Marketplace's Nancy Marshall Genzer is with us live from Washington this morning. Hi Nancy.
NANCY MARSHALL GENZER: Good morning.
CHIOTAKIS: So Geithner is testifying this morning before the Senate Banking Committee. Are we hearing some tough talk?
MARSHALL GENZER: Well yes, actually we are. Geithner said Beijing hasn't let its currency, the yuan, rise enough against the dollar. China's critics say it's devalued its currency by as much as 40 percent. And that gives Chinese exporters an advantage because their products are cheaper than U.S. products -- since the yuan is worth less than the dollar. Now China promised to loosen the yuan's peg to the dollar, letting it appreciate. But Geithner says that's not happening fast enough.
TIM GEITHNER: We are concerned, as are many of Chinas trading partners that the pace of appreciation is too slow and the extent of appreciation is too limited.
And Steve, Geithner also said China is allowing rampant piracy of U.S. products. And he said Beijing has put up trade barriers that keep American companies from operating there.
CHIOTAKIS: So then, Nancy, what is the administration going
to do about all this?
MARSHALL GENZER: Well until now, the White House has preferred quiet diplomacy with China. That's how President Bush dealt with Beijing. But today, Geithner amped up the pressure on China. He said the administration is committed to "using all tools available to ensure American firms and workers" can compete fairly with China.
CHIOTAKIS: Tools? What's he talking about -- tools?
MARSHALL GENZER: Well, for starters, the administration has
filed two new trade cases against China before the World Trade Organization. If the WTO rules in Washington's favor, the U.S. could slap sanctions on Chinese products.
CHIOTAKIS: Marketplace's Nancy Marshall Genzer reporting from our Washington studio. Nancy, thanks.
MARSHALL GENZER: You're welcome.
Consider this from the viewpoint of the Chinese. The U.S. Dollar is the world's reserve currency, which allows the Federal Reserve to print unlimited amounts of fiat currency and export the inflation to foreign countries like China. How can we honestly blame them for likewise playing the currency manipulation game? The problem began in 1971 when Nixon took the U.S. Dollar off the Gold Standard and we started playing "bankster tricks".
