U.S. Senator Lindsey Graham is calling for Congress to act against a Chinese government practice that he says hurts the United States.
At issue is China’s practice of tying its dollar equivalent, called the yuan, to the dollar on a fixed exchange rate which economists say keeps the yuan below its fair market value. However, in June the Chinese government announced it would allow the yuan greater flexibility against the dollar.
The move may have bought political capital for the Chinese, as the U.S. Treasury Department avoided blaming China in its semi-annual report, only saying the yuan is still undervalued. But Senator Lindsey Graham isn’t buying the reform, calling it a “political gesture” by China.
Graham complained that presidents from both parties have failed to state the obvious, that China is manipulating the yuan for an unfair competitive edge in prices against the U.S. He called on Congress to do what he says the President won’t: Pass legislation that challenges China’s practices.