A local manufacturer advocate and Republican Congressman Phil English are among the many people across the region disappointed the Bush administration found China hasn’t been manipulating its currency to gain economic advantage.

On Monday, Treasury Secretary John Snow said China’s decision to allow a small revaluation of its currency last July has been a factor in deciding not to brand China a currency manipulator, but Snow also said China must do more.

“I think he’s absolutely wrong,” Larry Sippy said of Snow. “They (China) are not doing enough, but they’re not manipulating their currency?”

Sippy, president of Sipco Molding Technologies of Meadville, is a past national president of the National Tooling and Machining Association — a trade group for the tooling and machining industry.

“They (the Bush administration) have got to realize they are putting Americans out of business,” Sippy said.

English, whose district includes Crawford County, is also concerned about the report.

“The administration’s lack of action in putting an end to China’s currency manipulation has been a real setback and I am extremely disappointed with the findings of Treasury’s most recent report,” he said in a statement Tuesday.

“There is no doubt that China has been skirting the rules established in the global trading system and has contributed to the loss of tens of thousands of jobs in our manufacturing sector,” English said.

In 2004, the United States racked up a trade deficit of $162 billion with China, the largest ever recorded with a single country, and this year’s deficit is expected to approach $200 billion.

American manufacturers have said China has purposely kept its currency undervalued by as much as 40 percent, making Chinese goods cheaper for U.S. consumers and making American products more expensive in China.

It’s a crucial issue for Crawford County since there is heavier reliance on manufacturing than other sections of Pennsylvania and the nation.

About 20 percent of all jobs in the county are related to manufacturing, compared to about 12.4 percent for Pennsylvania and 11 percent nationally. Most local manufacturing jobs are in the tooling and machining industry, supplying tools, equipment and parts to major manufacturers.

Since the recession that began in the fall of 2000, Crawford County has lost an estimated 1,000 jobs in the tooling and machining industry.

In July, China said it was allowing its currency, which had been pegged tightly to the U.S. dollar, to rise in value by 2.1 percent. The Chinese said they would allow the currency to fluctuate by as much as 0.3 percent on a daily basis. However, over the past four months, the Chinese yuan has been essentially unchanged in value.

Snow said the administration will focus on China’s actions in preparing the next currency report to Congress, which is due in April. He said China’s leaders have “committed repeatedly” to introducing more flexibility.

If the administration had found that China was manipulating its currency to gain trade advantages, that finding would have triggered consultations between the two countries.

It could have eventually led to trade sanctions against Chinese goods if the U.S. was able to prove currency manipulation before the International Monetary Fund.

However, there is legislation pending in the Senate to impose penalty tariffs of 27.5 percent on all Chinese goods unless China allows a greater revaluation of its currency. Sens. Charles Schumer, D-N.Y., and Lindsey Graham, R-S.C., the leading supporters of the legislation, have said they will bring up their measure by March unless China shows greater movement in allowing the value of its currency to rise.

Attempts to speak with Pennsylvania’s two senators — Republicans Arlen Specter and Rick Santorum — were unsuccessful Tuesday.

In July, the House approved a measure sponsored by Congressman English that imposes automatic tariffs if the U.S. Treasury Department finds China is manipulating its currency.

Both Sippy and English say legislation needs to be approved by both houses of Congress to address the currency manipulation issue.

“They’ve got to put some teeth in it and not back down,” Sippy said.

“Until the yuan fully reflects market forces, Congress must aggressively move forward to enact measures that address the broad spectrum of challenges resulting from China’s mercantilist trade policies, including currency manipulation,” English said.



Keith Gushard can be reached at 724-6370 or by e-mail at kgushard@meadvilletribune.com



Did you know?

About 20 percent of all jobs in Crawford County are related to manufacturing, compared to about 12.4 percent for Pennsylvania and 11 percent nationally.

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