For years world powers have been fighting a war away from the public view, a currency war. The dollar, euro, pound and Chinese yuan are the contenders. But the west is growing increasing angry at the Chinese government’s policy of keeping the yuan undervalued in order to increase exports. While China is taking steps towards having the yuan at correctly valued rates, the Senate has felt it’s not enough. This bill that has yet to be approved by the Republican controlled House, would red flag nations which “purposely keep its currency undervalued” and if said nations don’t make a significant effort to change this policy then tariffs kick in. This bill also prevents the US government from buying goods from that nation and OPIC (the Overseas Private Investment Corporation which is the US trade promotion agency) from investing in that nation. China blasts this bill saying that it will incite a trade war and “harms bilateral economic and trade cooperation”. Obama is currently not backing it, worried that it could be slapped down by the World Trade Organization. Is this the right way of getting China to play fair? Probably not, but it’s a start.

Regard,

Keanan