The U.S. Treasury Department should formally identify China, Hong Kong, Malaysia, Singapore, and Taiwan as currency manipulators, and begin negotiations with these countries to end their currency manipulation, argues a new policy memorandum by Economic Policy Institute economist Robert Scott.

Congress should also act immediately by approving legislation to require the Treasury secretary to begin negotiations with these countries, and impose tariffs of at least 25% within 90 days if any country fails to revalue its currency after being identified by the Treasury Department as a currency manipulator.

Addressing China’s currency manipulation is an issue of significant importance for the U.S. economy. Recent EPI research has shown that growing U.S. trade deficits with China – due, in part, to the Chinese government’s manipulation of its currency – caused 2.4 million U.S. jobs to be lost or displaced in manufacturing and other trade-related industries between 2001 and 2008 alone.

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