Getting Foxy on Currencies

The Treasury Department’s announcement that it’s delaying a much-anticipated decision on whether China manipulates its currency got lots of coverage—and most of it is pretty straight. But this economic saga contains big bits of politics and theater, and it’s good to see that thrown in the mix, too.

The Journal is among the straightest of the straight.

U.S. Buys China Time on Currency

A U.S. Treasury decision to delay making a determination on whether China is manipulating its currency could give Beijing some room to let the yuan rise in value. But some U.S. lawmakers and business groups are continuing to push for a tougher, and faster, approach.

You could almost see the yawns of people who’ve written this story a few times before.

Bloomberg’s take was similar.

Geithner Counts on Delay to Let China Strengthen Yuan

But the lede gives the story a bit more context.

Treasury Secretary Timothy F. Geithner, by delaying a report on global currency policies, is betting international diplomacy will work better than U.S. pressure to get China to strengthen the yuan.

And Bloomberg delivers the market angle:

Last week, yuan forwards posted their biggest weekly gain in almost three months on mounting speculation China will loosen its grip on the currency after data showed an economic recovery is gathering pace.

While a stronger yuan will help cut costs in imported fertilizers and pesticides, some agricultural sectors may face a “collapse” if exchange-rate pressures climb, the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce & Animal By-Products, said in an April 2 report on its Web site.

Animal by-products? Maybe something was lost in translation.

Fox does its foxy thing with the story:

White House Denies Charges of Caving to China on Currency

Chuck Schumer is the usual leader of the gang of Democrats in Congress who want to see tough action on China. But Fox instead focuses on Sen. Arlen Specter, the Democrat-turned-Republican-turned Democrat, who’s got an interesting take:

Specter acknowledged the United States needs China’s support in seeking United Nations sanctions on Iran over its nuclear program. But he cautioned that the Obama administration should not overstate China’s negotiating position.

“The Chinese are not doing us a big favor in joining that. It’s not in their interest to have Iran with a nuclear weapon — so that if we face up to the currency issue, the steel industry can provide a lot more jobs in my state and across the country,” Specter said. “If we get something concrete, a delay might be OK, but we can’t stand back and let them manipulate the currency and run us ragged on the economy.”

But the White House denied any correlation between the currency report and Iran sanctions.

Like I said, interesting take. But it would nice if Fox reminded readers that Specter still has to deal with a primary back home. While he’s ahead in the polls, plenty of Pennsylvania Democrats still aren’t convinced that he’s one of them, which might help explain why he’s eager go on the teevee and talk about jobs.

For using the fewest words to get to the point on this story, the prize goes to my old FT colleague, Alan Beattie.

So now it looks like the April 15 deadline for the US Treasury’s currency report is conveniently going to slip, largely because it would look a bit churlish to welcome Hu Jintao to Washington for the April 12-13 nuclear talks and then hang a big scarlet sign saying “MANIPULATOR” round his neck as soon as he steps off the plane.

Ahh. Diplomacy.

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Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at