The Obama administration said Friday it will delay a decision on whether China is manipulating its currency to gain trade advantages until after a series of upcoming international meetings. The extra time will allow top officials from both countries the opportunity to discuss the matter.
The currency report under law was scheduled to be released on Saturday, although this administration and previous administrations have often missed the deadline.
The delay is coming at a time when the administration is under increased pressure to brand China as a currency manipulator.
The Senate this week passed legislation that tightens guidelines used to determine when a country is unfairly manipulating its currency on a 63-35 vote that demonstrated broad bipartisan support for the measure.
Republican presidential candidate Mitt Romney assailed China's trade and currency policies in a speech Thursday and in an opinion piece Friday in the Washington Post in which he said he would brand China a currency manipulator on his first day in office as president.
In a brief statement, the Treasury Department said that it was delaying the currency report, which should be released on April 15 and Oct. 15 each year, until after a series of meetings including discussions this weekend in Paris among finance officials from the Group of 20 major economies.
Treasury said it would also wait until after a G-20 leaders' summit on Nov. 3-4 in Cannes, France, where President Barack Obama will have a chance to confer with Chinese officials and a Nov. 12-13 summit of leaders of the Asia-Pacific Economic Cooperation forum in Hawaii, which Obama and Chinese officials are also scheduled to attend.
Treasury's statement said the delay would give the administration "a chance to assess progress" before issuing its determination. Administration officials have repeatedly urged China to move more quickly to allow its currency to rise in value against the dollar. It has appreciated by about 10 percent since June 2010 when Beijing resumed allowing the currency to rise in relation to the dollar.
American manufacturers contend the currency is still undervalued by as much as 40 percent, making Chinese products cheaper in the United States and U.S. goods more expensive in China and playing a major role in widening the trade gap between the two nations.
The Commerce Department reported on Thursday that the U.S. trade deficit with China hit a record high for a single month of $29 billion in August and is running 9 percent above last year's level, when the deficit between the two countries hit a record $273 billion.
Treasury Secretary Timothy Geithner, in Paris for the G-20 meetings, said Friday in an interview with CNBC that "we have a big problem with China as a country and an economy." He said the problems include China's failure to allow its currency to appreciate at a faster rate but also other government policies that give unfair advantages to Chinese firms over U.S. companies.
The Senate currency bill faces an uncertain fate in the House where House Speaker John Boehner has voiced his opposition. Geithner said the administration could not support the measure without changes to make it compatible with international trade rules.
Romney wrote in the Post opinion piece that Obama had taken a tougher line with China as a candidate than he has since becoming president.
"China seeks advantage through systematic exploitation of other economies," Romney wrote.
Under the Senate bill, a process that could result in sanctions being set in motion if Treasury determined that China's currency was "misaligned" and the country did not act to resolve the issue. Currently, Treasury must determine that a country is willfully manipulating its currency, a higher bar to reach, before sanctions can be imposed.