News / Asia

Momentum Building for China Currency Legislation in US

Momentum Building for China Currency Legislation in US
Momentum Building for China Currency Legislation in US

As concerns are growing about the possibility of a global currency war, momentum is building in the U.S. Congress for the passage of legislation aimed at punishing China for its practice of undervaluing its currency. While U.S. officials, business lobbyists and trade representatives agree that China is not doing enough to let the value of its currency rise, they disagree on what solution works best.

Last week, just before U.S. lawmakers took a break before the upcoming November mid-term elections, a bipartisan vote in the House of Representatives approved a bill that could open the way for punitive tariffs on products from China.

Supporters of the bill say it has raised the prospect of taking action against China that is long overdue and will finally give the U.S. government more leverage to address the undervaluation of the Chinese currency.

Charlie Blum, the executive director of the Fair Currency Coalition, says the bill is a modest first step toward overhaul of U.S. currency policy.

"An overhaul that is badly overdue, an overhaul that if not accomplished soon may contribute to a new round of currency wars similar to that that deepened the great depression [1930]," he said. " An overhaul that quite frankly all true free traders should welcome and support."

Blum made his remarks Thursday at a forum on China's currency sponsored by the Washington International Trade Association. Blum's Fair Currency Coalition is an association of steel, textile and labor groups that have pressed Congress for years on the issue.

He and other supporters of legislation argue that diplomatic efforts to resolve the issue have failed.

Blum says that while the International Monetary Fund has rules that address currency distortions and their impact on trade, it has little power to compel countries - such as China - to change.

Support for currency legislation that seek to punish China is also strong in the U.S. Senate, where a similar bill sponsored by Senator Charles Schumer, a New York Democrat, has broad bipartisan support.

However, Erin Ennis, vice president of the U.S.- China Business Council says the costs of passing punitive legislation on China's currency outweighs the benefits.

"Those who say the exchange rate has a major impact on the U.S. trade deficit on U.S. jobs are selling Americans a bill of goods [being dishonest, making misleading promises]," said Ennis. "The fact is that the products that we make are goods that have not been made in the United States for years."

Ennis, who also spoke at the meeting on Thursday, says that punishing China with tariffs is unlikely to bring manufacturing jobs back to the United States that moved overseas decades ago.

She says that not only is it unlikely to get China to change, it also would trigger retaliation that could damage U.S. industries.

Ennis notes that 48 hours after the United States announced duties on tires from China last year, China announced anti-dumping tarriffs against U.S. poulty and auto imports.

Ennis says her organization's investigation of the impact of that move on the U.S. tire industry revealed that the duties led to an increase in tire prices in America, an increase of their import from other countries and failed to increase overall tire production or boost employment.

Gary Horlick, a trade lawyer, says there is no doubt China will respond.

"China will retailate, they've said they will retaliate, they do retaliate, I am counsel for the U.S. poultry industry," he said. "We've been hit with 60 percent duties in retaliation for U.S. duties on tires."

Ennis says that while a multi-lateral effort to get China to adopt a market driven exchange rate has been moving "maddenly slow," it is the best approach.

"We need to accept the fact that it is a mult-lateral push on this, as the Treasury Department is calling for, that is going to get the action and not unilateral action," she said.

International pressure against China is building with both the European Union and U.S. Treasury Secretary Timothy Geithner speaking out in recent days, calling on China to let the value of its currency rise.

It is a key topic at upcoming meetings this week of the World Bank and International Monetary Fund and is expected to be high on the agenda during G-20 meetings in South Korea in November.

Just before the last G-20 leaders summit in June, China dropped broke its peg with the dollar, but the currency has only risen about 2 percent in value since then. Some international economists say the Chinese currency is undervalued by as much as 30 percent.

On Thursday, China warned that economic ties might be damaged if U.S. lawmakers escalated the conflict over Chinese currency controls.

U.S. lawmakers will need to act swiftly if they'd like to get any legislation approved. They only have a brief window to pass legislation after they return from elections in November.

If legislation is not approved before the end of the current session of congress, it will die and lawmakers will have to start over.

You May Like

Video Analysts: Beijing Parade a 'Bazaar' of Stolen Technology

Show commemorating victory over Japan in World War II involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft More

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs