Global Biz

US to delay decision in China currency dispute

Updated: 2010-10-16 00:56
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WASHINGTON — The Obama administration plans to delay a decision on whether to label China a currency manipulator, a move long demanded by many U.S. lawmakers but also a potentially big wrench in an important relationship.

A Senate aide told Reuters the Treasury Department would hold off releasing its semi-annual report on the currency practices of U.S. trading partners.

It was not immediately clear how long the delay would be. Industry sources had said they expected the report to be unveiled at 1 p.m. EDT (1700 GMT) on Friday.

The Senate aide, speaking on condition he not be named, said he was "hearing they will delay its release."

"They're doing what they did last time. So they're announcing that they're not going to issue it today," the Senate aide said.

"I'm not sure if they will be explicit but I imagine post-G20" is the new timeframe for releasing the report, the aide said, referring to the summit of the 20 most developed nations in Seoul on Nov. 11.

A desire to look tough on "unfair" trade practices before the U.S. congressional election on November 2, in which Democrats are battling to keep control of Congress, could tempt President Barack Obama to cite China for the first time in 16 years.

But concern about angering the largest holder of U.S. government debt and the need for Chinese support on a host of international issues could mean continuing diplomatic efforts that have resulted in a nearly 2.5 percent rise in the value of China's yuan against the dollar in recent months.

It is a fine line and many observers think Obama will opt to play it safe with Beijing and give it another pass.