Senate OKs sanctions for nations holding down currency values
The Senate passed legislation aimed at sanctioning China and other countries that hold down the value of their currencies and undercut American manufacturers.
In a rare bipartisan vote, 16 Republicans joined with Democrats to approve the legislation, which was billed as a lifeboat for U.S. companies hurt by a flood of inexpensive Chinese imports.
But for supporters, the 63-35 victory probably will be short-lived.
Republican leaders in the House, as well as some U.S. business groups, have warned that the bill could trigger a trade war with China, and the House isn’t expected to take up the legislation. The Obama administration, too, has been cool on the issue, declining to take a formal position on the bill.
The legislation would impose tariffs on imports from countries that are found to be manipulating their currencies. The measure also would rewrite the Treasury Department’s definition of currency manipulation.
The sanctions could be imposed on any country, but the main target is China, which lawmakers have accused for years of rigging its exchange rate to make its exports cheaper and imports more expensive. That results in a de facto government subsidy for Chinese companies, these critics say.
“How do you compete against a 25% to 30% subsidy?” said Sen. Sherrod Brown, an Ohio Democrat.
The Economic Policy Institute, a left-leaning think tank, contends that the U.S. trade deficit with China has caused the loss of 2.8 million American jobs from 2001 to 2010.
Chinese officials blasted the legislation last week, saying it could disrupt relations with the U.S. and lead to a trade war.
In the House, Democrats are circulating a petition in an effort to force a vote on the bill, noting that similar legislation in the chamber has broad bipartisan support. But GOP Majority Leader Eric Cantor of Virginia put the burden on President Obama, saying he needed to show leadership on the issue if he wanted action.
“I would like to hear from folks who are on the frontline of this relationship with China,” Cantor said.
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