US can't drive global economy: White House

The United States has said that it can no longer drive the global economy, although it would continue to push China to live up to the obligations related to the issue of its undervalued currency.

US has been accusing China of undervaluing its currency to push exports, saying that it has been harming the American economy.

The White House comments came as the latest trade figures showed that the US trade deficit has widened by 8.8 per cent from July, to $46.3 billion in August.

Imports from China entered the US at a record pace, leaving the trade deficit with China at an all-time monthly high of $28 billion.

The Obama administration has been asking the Chinese government to take action on its currency.

"We’ve seen over the past many months that the United States cannot drive world demand anymore. We cannot as a group create the demand all over the world for everybody else to sell their goods," the White House Press Secretary Robert Gibbs said.

He said US President Barack Obama has pledged to increase exports, but his administration would continue to put pressure on the Chinese government to live up to its obligations in the currency arena. Gibbs was responding to a question at his daily news conference.

Meanwhile, Senator Sherrod Brown has said in a statement, "While the Chinese government is announcing record exports, Ohio workers are facing layoffs and our manufacturing facilities are shuttering."

He said China was indulging in unfair manipulation of its currency that allowed its underpriced imports to undermine American-made products.

"If we’re going to rebuild our state’s manufacturing base, we need to enforce trade laws and crack down on deceptive practices like currency manipulation, which stack the deck against American workers and allow cheap and often unsafe products to infiltrate our markets," Brown said.

He asserted that the Obama administration and Congress must do more to address China’s trade practices.

"Next month, I will be fighting to pass legislation in the Senate that also addresses currency manipulation, so that we can start to take steps towards addressing this egregious trade violation and begin to rebuild our country’s manufacturing base," Brown said.

A legislation passed by the US House of Representative directs the US Department of Commerce to treat currency undervaluation as a prohibited export subsidy, which would open the door for the US government to respond by imposing import duties.

Following the legislation’s passage in the House, Brown called for the Senate to pass the bill when the Senate returns to session next month.