Unjust Chinese trade and currency policies are thought to be to blame for the loss of as many as 2.4 million U.S. jobs from 2001 to 2008, according to a study released Tuesday from the Economic Policy Institute.
The report indicated that China's "currency manipulation," which came to focus in late 2009 when President Obama met with Chinese leaders on the issue, was the primary reason for the U.S. trade deficit with China. A number of other Chinese practices have also been called into question in relation to the trade deficit.
The Treasury Department will release a semi-annual report on April 15 in which they determine whether or not to condemn China as a currency manipulator. For several weeks, U.S. and China relations have been strained. Google’s attempts to discontinue the censorship of search results with verbal U.S. government backing and legislators encouraging the label of currency manipulator. President Obama has resisted using the label until now.
The institute's report cited interference by China in refusing to allow the yuan to rise for extended periods of time. As a result the yuan has stayed artificially low, placing a notable subsidy on Chinese exports.
Economists predict that unless China raises the true value of the yen by 40 or more percent or does away with other trade distortions that job losses will continue to grow.
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