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

    Escalation of Media Crackdown in Turkey Heightens Concerns

    Critics see 'a new dark age' as arrests of journalists, closures of media outlets by Erdogan government mount

    Russia Boasts of Troop Buildup on Flank, Draws Flak

    Russian military moves counter to efforts to de-escalate tensions, State Department says

    Video Iraqis Primed to March on Mosul, Foreign Minister Says

    Iraqi FM Ibrahim al-Jaafari tells VOA the campaign will meet optimistic expectations, even though US officials remain cautious

    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.
    Immigrant Delegate Marvels at Democratic Processi
    X
    Katherine Gypson
    July 27, 2016 6:21 PM
    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video A Life of Fighting Back: Hillary Clinton Shatters Glass Ceiling

    Hillary Clinton made history Thursday, overcoming personal and political setbacks to become the first woman to win the presidential nomination of a major U.S. political party. If she wins in November, she will go from “first lady” to U.S. Senator from New York, to Secretary of State, to “Madam President.” Polls show Clinton is both beloved and despised. White House Correspondent Cindy Saine takes a look at the life of the woman both supporters and detractors agree is a fighter for the ages.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video First Time Delegate’s First Day Frustrations

    With thousands of people filling the streets of Philadelphia, Pennsylvania for the 2016 Democratic National Convention, VOA’s Kane Farabaugh narrowed in on one delegate as she made her first trip to a national party convention. It was a day that was anything but routine for this United States military veteran.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora