The US is seeking Brazil’s support in increasing the number of countries pushing for a stronger Chinese currency. Reuters reported that during a visit to Brazil, US Treasury Secretary Timothy Geithner brought up the issue of currency manipulation.
Mr. Geithner has urged Brazil to put pressure on China on the issue of currency undervaluation and let the Yuan appreciate.
China is accused to keep its currency undervalued to boost its exports. The US says a weak currency helps China keeping costs low artificially thus making their exports attractive.
Brazil will become a willing partner of US since its economy is also being hurt by cheap Chinese imports, Mr. Geithner said. Brazilian manufacturers recently complained to the government that domestic manufacturers are struggling against Chinese goods both in the local as well as international markets.
Mr. Geithner – widely perceived as one of the most powerful economic policymakers in the US, travelled to meet Brazilian President Dilma Rousseff and members of her cabinet. He discussed the issue with Brazilian Finance Minister Guido Mantega during a meeting separately.
Mr. Geithner said the US and Brazil will “together on the global stage to build a more balanced and more stable, stronger multilateral economic system”, after meeting Ms Rousseff.
The Wall Street Journal reported that the two sides did not outline any roadmap about dealing with Chinese currency.
However, there is a possibility of the two sides speaking in unison on the issue in the upcoming G20 meeting.
When Mr. Geithner brought up the issue of Yuan undervaluation, he was told that Brazil “was against manipulating exchange rates”, a government source claimed.
The US has already started taking steps to counter cheap Chinese imports that it considers harming its domestic industry.
A US trade panel approved fresh duties on Chinese steel drill pipes. The US International Trade Commission said that there is enough evidence that the Chinese cheap imports used in oil drilling, are harming domestic companies.
The latest tariff is a new addition to a long list of similar measures taken against Chinese companies by the US.