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• United States Diplomatic Mission to Italy

Summary

In response to international pressure over its policy of pegging its currency (the yuan) to the U.S. dollar, the Chinese government on July 21, 2005, announced it would immediately appreciate the yuan to the dollar by 2.1% and adopt a currency policy based on a basket of currencies (including the dollar). Many Members have long charged that China "manipulates" its currency in order to make its exports cheaper and imports into China more expensive than they would be under free market conditions. They further contend that this policy is responsible for the large and growing U.S. trade deficits with China and the loss of U.S. manufacturing jobs. China's July 2005 reforms have done little to lessen congressional concerns. Several bills addressing China's currency have been introduced in Congress, including S.295, which would raise U.S. tariffs on Chinese goods by 27.5% unless China appreciated its currency. This report summarizes the main findings CRS Report RL32165, China's Currency: Economic Issues and Options for U.S. Trade Policy, by Wayne M. Morrison and Marc Labonte, and will be updated as events warrant.

Related Legislation:
• S.295

Related Reports:
• RS21625

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