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

    Native Americans Ask: What About Our Water Supply?

    They say they have been facing a dangerous water contaminant for decades - uranium – but the problem has received far less attention than water contamination by lead in Flint, Michigan

    Pakistan's President Urges Nation Not to Celebrate Valentine's Day

    Mamnoon Hussain criticizes Valentine's Day, which falls on Sunday this year, as a Western import that threatens to undermine the Islamic values of Pakistan

    Mother of IS Supporter: Son Was Peaceful, 'Role Model'

    Somali-American Abdirizak Mohamed Warsame pleaded guilty Thursday to charges of conspiring to provide material support to Islamic State militants

    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.
    Two-thirds of World Faces Water Shortagei
    X
    February 12, 2016 7:31 PM
    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video Two-thirds of World Faces Water Shortage

    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video Gateway to Mecca: Historical Old Jeddah

    Local leader Sami Nawar's family has been in the Old City of Jeddah for hundreds of years and takes us on a tour of this ancient route to Mecca, also believed to be the final resting place of Adam's wife, Eve.
    Video

    Video New Technology Aims to Bring Election Transparency to Uganda

    A team of recent graduates from Uganda’s Makerere University has created a mobile application designed to help monitor elections and expose possible rigging. The developers say the app, called E-Poll, will make Uganda's democratic process fairer. From Kampala, VOA's Serginho Roosblad reports.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video Russia Bristles at NATO Expansion in E. Europe

    Russian Foreign Minister Sergei Lavrov is meeting Friday with the head of NATO after the Western military alliance and the United States announced plans for the biggest military build-up in Europe since the Cold War. Russia has called NATO's moves a threat to stability in Europe. But NATO says the troop rotations and equipment are aimed at reassuring allies concerned about Russia as VOA's Daniel Schearf reports from Moscow.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.