Washington, DC – On May 9-10, 2011, a delegation of Chinese and American government officials – led by Treasury Secretary Geithner and Secretary of State Clinton – will meet in Washington, DC, for bilateral discussions on economic, trade, and military policies as part of the U.S.-China Strategic & Economic Dialogue (S&ED). The talks represent an important opportunity for the Administration to back its tough talk on China’s undervalued currency with strong action. In his run for President, then-Senator Barack Obama had harsh words about China at an AAM candidate forum in Pittsburgh on April 14, 2008, saying, “Here’s the bottom line, you guys keep on manipulating your currency, we are going to start shutting off access to some of our markets.”

Yet, despite broad consensus that China’s deliberate intervention in the currency market is harming American interests, the Obama Administration has repeatedly delayed reports due to Congress in which it is required to list countries with a misaligned currency. When the reports are eventually released, China and its severely undervalued currency are nowhere to be found. The most recent report, due by April 15, 2011, has been delayed until after the S&ED talks conclude.

“China’s currency manipulation should be the main focus of these talks,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM). “If the Administration will not get tough and demand that China play by the rules, Congress will have no option but to once again pass tough legislation to counter the artificial advantage China enjoys on trade.”

The American manufacturing sector has been devastated since China joined the WTO in 2001, with more than 5 million factory workers losing their jobs and often being forced to accept lower pay and fewer benefits in new jobs. Even at the current rate of manufacturing job creation, it would take 24 years to restore all of the lost manufacturing jobs our economy has shed. “It’s starting to sound like a broken record for the millions of jobless and displaced American workers who keep hearing the same old tune from this Administration on China,” said Mr. Paul. “We hear tough talk, but we need equally tough action to level the playing field for American companies and their workers if this economy is to grow and prosper in the coming months and years.”

Meanwhile, as unfair trade forces production overseas, our national defense industrial capabilities become weaker and we rely on critical components for weapons systems from uncertain trading partners, such as China who has been restricting exports of rare-earth minerals and elements used in many defense applications. Americans correctly believe that our economic strength and national security depends on a strong manufacturing sector.

Here is a snapshot of the U.S.-China economic relationship: