U.S. central bank chief Janet Yellen said Tuesday she is opposed to the idea of adding clauses banning currency manipulation to any trade deals, such as an envisioned Pacific free trade initiative.
Yellen, chairwoman of the Federal Reserve, told a congressional hearing that inclusion of such clauses in the U.S.-led Trans-Pacific Partnership deal and other trade agreements would “hamper or even hobble monetary policy.”
Yellen took the position as some U.S. lawmakers have been increasingly displeased at monetary easing measures in other countries that could result in lowering the value of their currencies, as the recent appreciation of the dollar against other major currencies has hurt American exporters.
Some U.S. lawmakers are seeking to introduce a bill that would authorize tariffs on imported products if the United States formally recognizes a monetary policy in the trade partner as currency manipulation.
“I would really be concerned about a regime that would introduce sanctions for currency manipulation into trade agreements,” Yellen told the Senate’s Committee on Banking, Housing and Urban Affairs in answering a question.