The US Commerce Department is once again considering launching an investigation into whether China’s currency exchange rate is an illegal trade subsidy under WTO rules, Reuters reported, citing a letter from Commerce Secretary Gary Locke. There are presently two cases before the Commerce Department brought by US producers arguing that the renminbi is artificially undervalued against the dollar, creating a defacto price advantage for Chinese exporters. At the recent Strategic Economic Dialogue (SED) held between the US and China, the US appeared to accept that China would not revalue the renminbi in the immediate future. However, the US has not compromised on high-tech export restrictions to China, and China continues to shelter North Korea from international censure or sanctions. In addition, in what is perceived as retaliation for arms sales to Taiwan, Beijing has delayed a formal visit by US Defense Secretary Robert Gates.
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