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January 18, 2006
Progress at Treasury?

It looks like we might have some progress at the U.S. Treasury Department, which mostly botched the China currency-trade issue over the last few years. Now Undersecretary Tim Adams is changing the biannual monetary-trade report that previously was used, among other purposes, to label nations "currency manipulators," whatever that means. As Adams now acknowledges, the economics surrounding these currency and trade matters is much more subtle than the "on-off switch" approach that Treasury had been taking (and that Congress wished it would continue). There are no guarantees the new, more nuanced, more frequent reports will also be more intelligent, but this change points in the right direction.

-Bret Swanson

UPDATE: Maybe I spoke too soon. Other articles suggest Tim Adams wants the IMF and the international community to push harder for a Chinese yuan appreciation and that the new Treasury monetary report is a means to that end. This leads one to believe Treasury hasn't changed its flawed economic view, only its political tactics.

Dotted Divider Line

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