Applaud Obama Administration for Not Starting Trade War With China

Target: The Obama Administration

Goal: Thank the Obama Administration for not provoking a trade war with China.

In recent years many high-profile American political and economic figures have called for an official U.S. labeling of China as a currency manipulator. The Obama Administration declined to bestow this label, and the harsh penalties that would surely follow, onto China in last months’ Treasury Report on currency manipulation. This is a rare case of government inaction that we should be grateful for. By not giving into this pressure, the administration has made a fair, even-handed assessment of this nuanced and complex currency issue, and by doing so has saved American companies from harmful retaliation that could easily outweigh the possible benefits of this currency manipulator label.

Labeling a country a currency manipulator means that country is unfairly devaluing their currency to give their products an unfair advantage in the international marketplace. To be fair, China’s currency is significantly undervalued. This is due in large part to the use of a pegged currency, a currency system used to stabilize and protect developing economies, despite being on pace to overtake the United States with the largest GDP per capita in the world by 2016. However, China only began forming modern economic structures 35 years ago, and they are years away from having a fully functional nationwide economy. In addition, given the current international economic climate, China can hardly be blamed for insulating their markets from this global recession.

Labeling China a currency manipulator would mean that the U.S. could enact retaliatory tariffs against Chinese goods. These tariffs would almost certainly spark a trade war with China, which is something the U.S. economy does not need. Thankfully the Obama administration has wisely refrained from labeling China as such, avoiding another bump in the road for the United States’ already tepid economic recovery.


Dear Obama Administration,

We wish to applaud your decision to not label China a currency manipulator in November’s Treasury Report. By doing this, you avoided a potentially costly trade war with one of our biggest trade partners. You made a reasonable assessment of a very complicated issue, and for that we commend you.

In light of China’s lack of nationwide economic structure, and the recent global economic recession, we believe China has enough reason to legitimize their undervalued currency to the point where labeling them a currency manipulator is excessive. The tariffs this label would bring against China would almost sure spark retaliatory measures from China against our industries – something our tepid recovery certainly does not need.

Thank you again for setting an example and ignoring the irrational calls for this label from those who don’t understand the subtleties of this issue. We hope you will continue to look at this currency issue as evenhandedly as you have.


[Your Name Here]

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