Two U.S. lawmakers say they are postponing a vote on a tariff bill against China after receiving assurances from Chinese officials that Beijing is taking steps to reform its currency.
Senator Lindsey Graham, a South Carolina Republican, and Senator Charles Schumer, a New York Democrat, say they are delaying a vote on the tariffs bill against China, which had been scheduled this week, for six months, saying Beijing is making progress toward currency reform.
The two lawmakers, along with Republican Senator Tom Coburn of Oklahoma, were in Beijing last week to press Chinese officials to do more to float the country's currency, the yuan.
At a news conference, Schumer expressed guarded optimism about China's efforts.
"Let me be clear: we expect continued progress on this issue," he said. "For the first time ever, the Chinese five-year plan says the currency should float. For the first time, they have put mechanisms in place that allow the currency to float, and we believe the progress we have seen in the last two or three weeks will continue."
The legislation drafted by Schumer and Graham would impose 27.5 percent tariffs on Chinese imports if the currency dispute is not resolved. The Senators say the bill enjoys strong bipartisan support.
Indeed, many in Congress believe the yuan is largely undervalued against the dollar, giving China an unfair export advantage and hurting U.S. businesses.
Graham warns Beijing that he would not hesitate to call for a vote if currency reform slows in China over the next six months.
"If the Chinese renege on the efforts to reform their currency, they do so at their own peril," he said. "They will face the wrath of the Senate."
Graham says he hopes Chinese President Hu Jintao will announce additional currency reforms when he visits Washington next month.
Meanwhile, two other Senators introduced a separate bill aimed at pressing other countries, including China, to revalue unfair currency rates.
Senator Chuck Grassley, an Iowa Republican, and Senator Max Baucus, a Montana Democrat, are sponsoring the measure, which calls on the Treasury Department to work with the International Monetary Fund to resolve currency imbalances.
"We need to engage China firmly, not just with an eye to economic threats, but with an eye to economic opportunities as well," Senator Baucus said.
The bill would cut off U.S. government loan guarantees and some lending from government-backed development banks if countries do not comply.