China Must Change Currency Policies: The Bush administration said Thursday that China should [stop pegging its currency tightly to the U.S. dollar] which American manufacturers blame for soaring trade deficits and the loss of U.S. jobs.

American manufacturers contend that China’s decade-long practice of keeping its currency valued at around 8.28 yuan to the dollar, has resulted in the Chinese currency being undervalued by as much as 40 percent, giving the Chinese a huge competitive advantage.

A cheaper Chinese currency makes Chinese goods cheaper for American consumers and U.S. products more expensive for Chinese consumers.

Legislation has been introduced in both the Senate and the House to impose across-the-board tariffs of 27.5 percent if China does not act to change its currency policies.