The U.S. Treasury, in a currency report released July 8, did not label China a currency manipulator, but some the Senate disagree with the Treasury's assessment.
Connecticut Democrat Chris Dodd, chair of the Senate Banking Committee, indicated that he would hold a hearing at an as-yet undetermined date to determine how to make American companies more competitive with Chinese firms.
For months, some senators - New York Democrat Chuck Schumer and South Carolina Republican Lindsey Graham, most notably - have called on China to let its currency rise. Beijing indicated that it would do so in June, but some see its currency moves as inadequate. Graham suggested on July 9 that China's announcement was little more than a gesture. "The only remedy available is for Congress to pass legislation addressing currency manipulation," he said.
Dodd, too, was emphatic about the need for increased pressure on China. "For years," he indicated, "American workers have not been able to compete on a level playing field because of China's undervalued currency."
The upshot to a stronger yuan is that it would make Chinese goods more expensive for foreign consumers. So while a rise in the yuan would improve American companies' competitiveness, it would also make Chinese products - electronics, toys and other goods - pricier in America.
