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For several years, China has been the gift that has kept on giving to cheerleaders for current American trade policies, as its currency policies allowed President Obama and his trade supporters to all but declare “mission accomplished” for the decision to address Beijing’s predatory approach to globalization through quiet diplomacy, not punitive tariffs.

Now after letting its currency strengthen versus the U.S. dollar, Beijing, is permitting the tightly controlled yuan weaken once again. So as during most of the previous decade, Chinese goods are once again getting major price advantages over competing products in all global markets for reasons having nothing to do with free markets or free trade. Let’s see if Mr. Obama and his backers will be as quick to admit failure as they were to claim success.

China’s currency policies have had their ups and downs for the last 15 years or so, and throughout the cheerleaders consistently have mis-represented the idea of proper currency valuation. Moreover, some impressive evidence indicates that the yuan has been much more undervalued – and therefore distorting trade flows – to a much greater extent than the standard exchange rate figures (from the Federal Reserve) show.

Nonetheless, it’s still important to note that those standard figures have reported a 20.39 percent increase in the yuan’s value against the dollar since July, 2005. It’s just as important to note that, during this period, the dollar is up versus a broad Fed measure of world currencies by about 7.70 percent, so by this key measure, China has been a big outlier in ways that work to its disadvantage.

And even though the yuan has fallen in value since it hit its peak versus the dollar, in mid-January, 2014, it’s fallen much less than that basket of other currencies – 8.63 percent for the yuan, as of the Federal Reserve’s latest (May 27) figures, versus 19.04 percent.

But the key baseline date Washington and everyone else should be looking at is last August 11. That’s the day the Chinese government clearly decided it had had enough of a stronger yuan, and devalued the currency by a stunning 1.83 percent in one day. And from last August 10 though May 27, the yuan has dropped by 5.67 percent versus the dollar. But that group of major currencies is down only 2.86 percent against the greenback. Moreover, since May 27, the yuan has been permitted to sink another 0.42 percent. (I couldn’t find a comparably recent number for that broad dollar index.)

With the American economy still mired in an historically sluggish recovery, and manufacturing output still faltering, expect all the remaining presidential candidates to start decrying Chinese currency manipulation again. If it continues, Beijing’s apparent gambit could also further diminish the chances that Congress will approve Mr. Obama’s Trans-Pacific Partnership (TPP) agreement, since a U.S. failure to respond adequately coupled with the deal’s own lack of currency disciplines with teeth would arguably turn Congressional approval into a green light for other would-be foreign manipulators. Pity the lawmaker who’d have to answer for that vote.

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