US says no basis for probe into Chinese currency claim

The allegations were made by local producers angry about imports of aluminum products and coated paper from China.

The U.S. Department of Commerce said “allegations that China's currency practices constitute an unfair subsidy under U.S. countervailing duty law failed to meet the requirements for the initiation of an investigation.”

The statement as the department announced that US$514-million worth of Chinese aluminum exports to the United States were found to be unfairly subsidized.

It said it would impose countervailing duties of up to 137.65 percent on Chinese exports of aluminum products used for window and door frames, gutters, cars, trucks, boats and furniture parts.

“Today's currency decision was based on a careful evaluation of the specific legal arguments and evidence put before the department, in relation to the standards for the initiation of an investigation under the CVD (countervailing) law,” the department's deputy assistant secretary for import administration Ronald Lorentzen said.

The department has declined to investigate complaints about China's currency practices in 11 cases in the past, despite the U.S. criticism that China keeps its currency undervalued for trade gains.

Staff at the International Monetary Fund say the yuan is “substantially undervalued” against the dollar but do not cite any particular levels.

Some economists think the yuan is undervalued by between 25 and 40 percent, giving Chinese exporters an unfair price advantage.

U.S. lawmakers have been pressing for legislation that would require the Commerce Department to apply punitive sanctions against China and other countries with allegedly undervalued currencies.

The ruling Tuesday “is still incomplete,” said Democratic Senator Charles Schumer, who has been spearheading congressional efforts to slap sanctions against Beijing over the undervaluation issue.

“The Commerce Department made its finding while still managing to ignore the elephant in the room, which is China's currency manipulation,” he said in a statement.

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