The U.S. Treasury announced today, for the 12^th time, that the Obama Administration has determined that neither China, nor any other “major trading partner of the United States met the standard of manipulating the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade…”

This political document ignores the fact that China purchased $681 billion in total foreign exchange reserves between December 2012 and June 2014, and more than $2 trillion since this Administration took office. Currency manipulation by China and approximately 20 other countries has increased the U.S. trade deficit by $200 to $500 billion. Elimination of currency manipulation would create 2.3 million to 5.8 million U.S. jobs, without raising public spending at all (indeed, reducing the trade deficit through currency re-alignment would reduce the federal budget deficit).

Recent economic research has shown that purchases of Treasury bills and other foreign assets increases a country’s current account by between 60 and 100 cents for each dollar spent on foreign exchange reserve purchases. The Chinese Yuan (Renminbi) fell 1.3 percent against the U.S. dollar between December 2013 and October 10, 2014. Currency manipulation has flooded U.S. markets with cheap and unfairly priced products, and diminished US exports to China, as well as to third country markets where U.S. and Chinese goods compete. The U.S. goods trade deficit with China increased 4.1 percent through August 2014, compared to the same period last year, despite the growth slowdown in the U.S. economy. Japan, which also has a history of currency manipulation, has allowed its currency to fall 27 percent in the past two years. The U.S. goods trade deficit with Japan is the second largest amount our trading partners.

Ending currency manipulation is the single most effective policy option available for creating millions of U.S. jobs and closing the remaining U.S. jobs gap caused by the Great Recession. Congress can help, by passing pending legislation (HR 1276 and S114) that would allow the Commerce Department to treat currency manipulation as a subsidy in countervailing duty trade cases. In addition, the President and Federal agencies possess the tools needed to end currency manipulation with the stroke of a pen. The Treasury and Federal Reserve have the authority needed to offset purchase of foreign assets by foreign governments by engaging in countervailing currency intervention. By taking these steps, the U.S. government could make efforts by foreign governments to manipulate their currencies costly and/or ineffective.

But the place to start is by facing the facts. It is time for Secretary Lew to end the charade and declare that China is a currency manipulator. Ignoring this obvious fact was counterproductive long before the Obama administration took office. We have much to gain by recognizing the problem and confronting China directly, and the time for action is long past due.