USDA has released a major report on how the undervalued exchange rate for Chinese currency (the yuan) keeps the price of U.S. food and agricultural products more expensive to Chinese consumers than it should be. It's a source of growing anger in Washington that the policy unfairly inflates China's enormous balance of trade surplus by making their exports to the U.S. cheaper than they should be, while making our exports to China more expensive than they should be. Some even liken it to what used to becatted "mercantilism," or waging economic "war" against the rest of the world. Here is our summary of the USDA report, which could sharply escalate pressure on China to let their currency "float" to its true value, boosting the purchasing power of Chinese consumers. China is expected to resist strongly.
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