The Bush administration gets says it’s getting serious about the dollar
Looks like the Bush administration is shifting from passive-aggressive to aggressive in trying to get the Chinese to revalue their currency. Andrew Balls and Edward Alden have the story in the Financial Times: The US administration is calling for China to move immediately to introduce a flexible currency, a marked shift in tactics after several ...
Looks like the Bush administration is shifting from passive-aggressive to aggressive in trying to get the Chinese to revalue their currency. Andrew Balls and Edward Alden have the story in the Financial Times:
Looks like the Bush administration is shifting from passive-aggressive to aggressive in trying to get the Chinese to revalue their currency. Andrew Balls and Edward Alden have the story in the Financial Times:
The US administration is calling for China to move immediately to introduce a flexible currency, a marked shift in tactics after several years of patient diplomacy aimed at nudging China towards allowing the renminbi to float. A senior US administration official told the Financial Times on Friday: “Action is needed now. This is a co-ordinated effort to get the message across.” The decision to demand prompt action by Beijing comes in the face of growing pressure from Congress over the burgeoning US trade deficit with China. Officials acknowledge they were shocked by a 67-33 Senate vote earlier this month to allow consideration of a bill championed by Democratic senator Charles Schumer that would impose a 27.5 per cent tariff on all Chinese imports if China does not revalue in the next six months. “I think they took the Schumer vote very, very seriously,” said Frank Vargo, international vice-president of the National Association of Manufacturers, which has been urging a harder US line on China’s currency. There is also concern in the administration that Beijing might have interpreted the Treasury department’s toned-down rhetoric of recent months as a sign that the US is prepared to be infinitely patient on the issue. The message is being delivered to China at all levels in advance of this weekend’s Group of Seven meeting in Washington. China, which has been a guest at the past two G7 meetings, is not sending its finance minister and central bank governor to this weekend’s gathering. (emphases in original)
That last bit suggests to me that this pressure won’t have an appreciable effect anytime soon. This will irritate the Bush administration but really irritate the European members of the G-7, who blame the United States and the Pacific Rim for the magnitude of current global imbalances. Developing…. UPDATE: See follow-on posts here and here.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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