WASHINGTON – The Bush administration said it will send Congress its report on China's currency practices on Wednesday, a report that American manufacturers hope will brand the country a "currency manipulator."
Treasury chief spokesman Tony Fratto refused Monday to say whether the report would accuse China of manipulating its currency to gain unfair trade advantages against American companies.
American companies contend that the Chinese yuan is undervalued by as much as 40 percent as a way of making Chinese goods much cheaper in this nation and American products more expensive in China.
That practice, U.S. companies say, is a big reason that the United States has seen the trade deficit with China soar to an all-time high of $202 billion last year.
The administration is required to report every six months to Congress and cite any countries that the United States believes are manipulating their currencies for trade purposes.
While the administration has been pressuring China to allow its currency to rise in value against the dollar for more than two years, the administration has resisted calls in Congress to designate China as a currency manipulator — a process that would trigger consultations between the two nations and could result in U.S. trade sanctions if the World Trade Organization agreed.
The report was delayed from its April 15 deadline to allow President Bush to discuss the currency issue with Chinese President Hu Jintao, who visited the White House last month.
Despite administration hopes for a major announcement, Hu during that visit simply repeated past pledges that China intended to introduce more flexibility into its currency system without setting any firm deadlines for doing so.