Is China Manipulating Its Currency?

Is China guilty, as charged by U.S. traders, of keeping its currency artificially weak? Despite some movement upward in recent months, the value of the yuan has remained relatively low against the dollar for some time now. And the Chinese have reaped the benefits, in the form of cheaper prices for their exports. American trading interests have repeatedly called on the Obama Administration (and Bush Administration before that) to take punitive action against China for its alleged monetary hijinks. Last fall, however, the U.S. Treasury Department failed for the 12th time specifically to identify China as a currency manipulator, even as Treasury has acknowledged that there are grounds for making such a determination. On this episode, Scott Paul, president of the Alliance for American Manufacturing, explains why his group believes China is indeed deliberately keeping down the value of the yuan. He calls for retaliatory action on the part of the U.S. But would such a move trigger a trade war?