Time US gave the yuan a break

The issue of China's foreign exchange mechanism has remained on the political agenda of the US for some years now and has popped up from time to time, eroding bilateral ties. Since the beginning of this year, the US has been pressing China to revaluate the yuan. Some US senators allege that its foreign exchange rate has been manipulated to keep the yuan's value low.

The latest US attempt is centered on how to link the so-called Chinese currency problem to its America's internal legal framework. In other words, it wants to lay down the legal basis for imposing anti-dumping and countervailing measures on Chinese imports for the so-called currency manipulation.

WTO multilateral trade rules provide the legislative realm for measures to address trade disputes, and the legal action the US is seeking to restrict China is not in line with the WTO rules. The WTO anti-dumping rules are aimed at imposing sanctions against dumping by private parties. The countervailing rules are aimed at sanctioning against member states providing illegal subsidies to their specific industries.