Congress Spins the Wheels of Currency Reform: Will a new bill addressing China's undervalued Yuan reach the president's desk?
Yesterday, Members of Congress introduced the bipartisan ‘Currency Reform for Fair Trade Act,' which would allow for undervalued currency to be treated as an actionable subsidy under U.S. trade law.
Essentially, the bill would help to tackle China's deliberately undervalued currency, the Yuan, which acts a subsidy for Chinese exports entering the U.S. market.
Congress has attempted similar legislation in the past few years, and Reuters correspondent Doug Palmer summarized the bill's prospects:
A bipartisan group of U.S. lawmakers on Wednesday began a new attempt to pass legislation that puts pressure on China to change its currency practices, reprising an effort that has previously failed to make it to the finish line.
The bill is similar to legislation that passed the House of Representatives in 2010 and the Senate in 2011, but which died in Congress before it could reach President Barack Obama's desk to sign into law.
Palmer said the bill is supported by "U.S. labor groups and domestic textile, steel and other manufacturers that compete in the U.S. market against Chinese imports," and quoted Alliance for American Manufacturing (AAM) President Scott Paul:
"It's clear the administration is not going to do enough to really press China on currency. That's why congressional action is so important," said Scott Paul, president of the Alliance for American Manufacturing.
Down With Tyranny editor Howie Klein was even more acerbic in his summary, observing that:
Wall Street shills in both parties have consistently prevented effective action against Chinese currency manipulation and this effort has been led by Members who have personally enriched themselves with shady dealings with China, particularly McConnell and Boehner.
Klein explain why such legislation is urgently needed:
When China can undervalue its currency, they can flood the U.S. market with "cheap" goods and destroy industries and, obviously, capture good-paying American manufacturing jobs. Also, that undervalued currency rate means U.S. goods become artificially and prohibitively expensive when entering the Chinese market. U.S. manufacturers-- and workers-- get killed both ways.
Action to address China's predatory trade practices enjoys the overwhelming support of U.S. voters, including 68% of Republican voters. It would seem to be a slam-dunk for such common sense legislation to sail through Congress. However, in the last Congressional session, House Speaker John Boehner blocked a similar bill from reaching a vote. As AAM's Paul explained to Klein, he finds Boehner's stance quite perplexing:
"[it's] hard to imagine why John Boehner stands with Beijing dictators and multinational outsourcers when a strong majority of Republican voters, and his own caucus, support the China currency bill. Here’s a bill that creates jobs, doesn’t cost taxpayers a dime, and strengthens our economy. Whose side is Boehner on: the Beijing dictators or ours?"
Read more about the ‘Currency Reform for Fair Trade Act.'
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