Not too hot, not too cold, just right.
U.S. Treasury Secretary Timothy Geithner performed a delicate balancing act on the Hill today. On the one hand, Geithner had to tell an increasingly angry Congress that he was serious about trying to persuade China to revalue its currency, the yuan. On the other, he wanted to head off the kind of unilateral action from Congress that could provoke a trade war, and endanger the administration’s efforts to engage Beijing on a whole slew of issues.
Democratic Senator Charles Schumer raged that “China’s currency manipulation is like a boot to the throat of our recovery,” and accused Geithner of being the only person in the room who did not believe China was manipulating its currency.
“I share your frustration,” was the first part of Geithner’s message to Congress, acknowledging that the pace of the yuan’s appreciation had been too slow. But leave the response to us was the other, unspoken part of the message today. The administration would use the upcoming G20 summit in Seoul in November to try to mobilize other world powers to pressure China for trade and currency reforms, Geithner vowed, adding officials were looking at all the tools at their disposal to “encourage” the Chinese to move more quickly.
China has already warned that pressure from Washington could backfire, and the administration clearly does not want to be caught in the crossfire between a furious Congress and a prickly Beijing. Geithner also seemed to downplay the chances that the administration would declare China a currency manipulator in October. “The only thing that I would observe is, wishing something does not make it so, and issuing a report that requires me to go consult changes nothing,” he said.
Here are our top stories today…
Geithner vows to take China currency dispute to G20
Treasury Secretary Timothy Geithner vowed to rally other world powers to push China for trade and currency reforms as he was grilled by lawmakers demanding a crackdown on Beijing’s policies. China warned that pressure from Washington could backfire.
For more of this story by Doug Palmer and David Lawder, read here.
