A bipartisan group of US lawmakers on Wednesday began a new attempt to pass legislation that puts pressure on China to change its currency practices, reprising an effort that has previously failed to make it to the finish line.
The bill is similar to legislation that passed the US House of Representatives in 2010 and the US Senate in 2011, but which died in Congress before it could reach US President Barack Obama’s desk to sign into law.
It came as US Secretary of the Treasury Jack Lew was wrapping up a two-day visit to China, where he pressed Beijing to allow the yuan to rise further against the US dollar.
Although China’s yuan has appreciated 16 percent in real terms against the dollar since June 2010 and hit an all-time high against the greenback on Wednesday, many lawmakers believe Beijing keeps it at an artificially low value to give Chinese companies an unfair trade advantage.
Representative Sandy Levin of Michigan, the top Democrat on the House Ways and Means Committee, introduced the currency bill with fellow Democrat Tim Ryan of Ohio and Republican lawmakers Tim Murphy of Pennsylvania and Mo Brooks of Alabama.
It is supported by US labor groups and domestic textile, steel and other manufacturers that compete in the US market against Chinese imports.
“It’s clear the administration is not going to do enough to really press China on currency. That’s why congressional action is so important,” said Scott Paul, president of the Alliance for American Manufacturing.
The bill would allow US companies to seek countervailing duties against Chinese goods on a case-by-case basis to offset any exchange rate advantage. However, some business groups such as the US-China Business Council have fought the legislation, fearing it would worsen trade ties.
Meanwhile, many US lawmakers believe Japan is unfairly driving down the value of its yen to help the country export its way out of decades of slow growth.
That has increased pressure on the administration to use talks on a proposed free trade agreement in the Asia-Pacific region to craft rules against currency manipulation, particularly if Japan is allowed into the talks in coming months.
At a Senate Finance Committee hearing on Tuesday, acting US Trade Representative Demetrios Marantis avoided taking a stand, but he said the administration was exploring the costs and benefits of including currency in the Asia-Pacific trade talks.