AISI Comments on China Currency Devaluation

China made a surprise devaluation of its currency today to bolster its faltering economy. The 2 percent devaluation of the yuan will make imports to China more expensive but will make exports more attractive to international traders.

The American Iron and Steel Institute (AISI) issued a statement today concerning today’s currency move by the Chinese government.

“Today’s action is further illustration of the Chinese government’s active role in manipulating the value of its currency to promote Chinese exports,” said AISI President and CEO Thomas J. Gibson. “China has consistently intervened directly in foreign exchange markets to control the value of the yuan versus the U.S. dollar to make their exports more competitive and impose new barriers to imports. Our government must address the massive damage that China’s undervalued currency is causing to our nation’s manufacturing sector, especially the steel industry.”

Gibson noted that U.S. Treasury Department again, in its April report on exchange rate policies, confirmed that the Chinese currency remains “significantly undervalued” but did not officially declare them a currency manipulator.

SMU will have a more detailed review of the currency values of the major steel trading nations against the U.S. dollar in our Premium newsletter which will be published tomorrow (Wednesday) morning.