Getting the story straight seems a bridge too far in Congress

A surge in Chinese exports and rising anger in the US Congress will put renewed pressure on China to allow its currency to rise against the US dollar.

Chinese trade figures showed exports leaping by 48.5 per cent in May over the year before, way ahead of analysts’ forecasts. Data released in the US showed America’s trade deficit widening slightly in April, with some economists arguing that the improvement in net trade and its contribution to US growth appeared to have stalled.

The data gave more ammunition to China’s critics in Congress, who have said they will proceed with legislation to restrict Chinese imports to correct the perceived misalignment of the country’s currency.

Thursday, Tim Geithner, Treasury secretary, warned China that congressional anger could result in rapid action. “I think the strength of the sentiment in Congress is overwhelmingly strong, it’s bipartisan and it reflects how important this is to the United States,” he told the Senate finance committee.

Charles Schumer of New York, the Senate’s third most senior Democrat, said he would seek to have his bill made into law within two weeks unless he saw signs of action from Beijing.

The Treasury has been pursuing quiet diplomacy with Beijing to allow the renminbi to appreciate, but Mr Geithner on Thursday told the committee that he had no idea when that might happen. In what appeared to be a shift in tone, the Treasury secretary on Thursday signalled that he shared much of Congress’s frustration and suggested that China needed to recognise how close the US was to legislation.

However, Mr Geithner argued that China’s trade surplus had fallen by around half as a share of its gross domestic product over the past two years, and said US exports to China had been rising sharply. “As we emerge from the global financial crisis, US exports to China have rebounded much more rapidly than overall US exports, and are now running 20 percent above their pre-crisis levels,” he said.

My take:

This is extraordinary, even by congressional standards of dimwittedness.

First, the Democrats, who control Congress and the White House, spend borrowed money recklessly, placing the U.S. at the mercy of any foreign power that wishes to embarrass or humiliate us.

Next, the Democrats blame the only bogeyman they can find, China's currency, for China's robust trade and economic growth.

Then, Congress members drop veiled hints that the U.S. might retaliate for China's currency valuation strategy by restricting U.S. imports of Chinese-made products.

Underscoring Congressional impatience, Treasury Secretary Timothy Geithner then warns China that the Congress means business.

Then, incredibly, Geithner acknowledges that China's trade surplus has been falling rapidly while U.S. exports to China have been rising rapidly.

Uff da.