The US Congress moved Friday to open the way for retaliation against China over its currency, warning that it has lost patience with quiet efforts to press Beijing to let its yuan appreciate. One day after President Barack Obama pressed Chinese Premier Wen Jiabao on currency in a meeting in New York, Obama's allies in Congress approved a measure that accuses Beijing of killing US manufacturing jobs with its yuan.
The House Ways and Means Committee, which writes tax laws, voted to expand the powers of the Commerce Department to allow it to impose tariffs when another nation is found to be manipulating its currency's value. Under longstanding regulations, the Commerce Department can only impose tariffs on foreign goods if the producer country directly subsidises an export.
The committee sent the bill to the full House, which is now set to vote on the measure next week, House majority leader Steny Hoyer said. "While a multilateral approach to addressing this issue is preferable, we cannot wait any longer to level the playing field for US businesses and protect American manufacturing jobs," Hoyer said in a statement. "We recognise the efforts China is making toward reform, but they need to act faster to allow their currency to appreciate." Critics accused Obama's Democratic Party of rushing the measure in a last-ditch attempt to win labour union support ahead of November 2 elections, in which the wobbly US economy is the headline issue.
Representative Charles Rangel, a Democrat from New York, scoffed at claims of electoral calculations and said the United States needed to act to restore its manufacturing industry and halt the flood of inexpensive imports. "We're sending a message to communist China that we will not tolerate unfairness in trade, notwithstanding the fact that we are the beneficiary of their cheap slave labour," Rangel said.
Representative Sandy Levin, a Democrat from economically struggling Michigan, said China's exchange rate policy "has a major impact on American businesses, and American jobs, which is what this is all about." Levin, who chairs the Ways and Means Committee, said the yuan's appreciation had been minuscule despite China's promises in June, in the face of pressure ahead of the Group of 20 summit, to be more flexible.
"If the Chinese take no action, the US has other means," Levin said. The Democrats revised the bill after concerns by the rival Republican Party that it would violate US commitments under the World Trade Organisation. Committee staff insisted the new bill was WTO compliant.
But Representative Kevin Brady, a Republican from Texas, doubted the measure would reduce the gaping trade deficit with China or create US jobs. Brady said that increasing US companies' access to China's vast consumer market and defending US intellectual property rights "would benefit thousands more American workers than a focus on Chinese currency alone."
"I am also suspicious that after four years of controlling Congress Democrats are now rushing this bill to the House floor in the final weeks ahead of the election. Playing politics with an issue this serious is risky for American workers," Brady said. Even if the House approves the measure, it is uncertain if the United States would impose tariffs. The Senate has not moved on legislation, and even if the law passes, retaliation would be at the discretion of the administration.
Comments
Comments are closed.