US lawmakers yesterday were expected to pass a bill to punish China over its allegedly undervalued currency, with many blaming the cheap yuan for lost US jobs five weeks before November elections.
The US House of Representatives was to vote on legislation expanding the powers of the US Commerce Department by allowing it to impose tariffs when another nation is found to be manipulating its currency’s value.
The measure enjoyed strong support from US President Barack Obama’s Democratic allies and their labor union supporters, as well as his Republican foes, and was expected to win approval, according to several leadership aides.
US lawmakers have redoubled their accusations that Beijing keeps the yuan — and therefore Chinese exports — artificially cheap, driving US manufacturers out of business and costing thousands of US jobs.
Critics of the bill have warned that, even if successful in forcing China to let market forces decide the yuan’s value, the bill will chiefly benefit other Asian economies where manufacturing is still cheaper than in the US.
If the measure clears the House, the US Senate could take up a companion bill after the elections.
The vote was to come after weeks of assertive lobbying by Washington — from Obama on down — for China to take steps on its currency and a range of other issues, including rampant piracy of US intellectual property.
The US president made his case to Chinese Premier Wen Jiabao (溫家寶) on the sidelines of the UN General Assembly last week, but his appeal did not appear to yield a breakthrough and China has denied doing wrong.
China pledged in June to loosen its grip on the yuan, which had been effectively pegged at about 6.8 yuan to the US dollar since mid-2008. Since then, the currency has gained less than 2 percent against the greenback.
Obama “got nothing — nothing, a big goose egg — for his efforts,” US Senator Chuck Schumer, one of the sternest congressional critics of China’s currency policy, said in a speech on Tuesday.
“Plain and simple: It’s not working. China is merely pretending to take significant steps on its currency. This suckers’ game is never going to stop unless we finally call their bluff,” he added.
At the same time, 181 House members wrote Obama asking that he take steps to blunt China’s “predatory” actions to gain “unfair advantage” in environmentally friendly green technology and “capture this emerging sector.”
They also pushed Obama to ramp up US government resources dealing with alleged unfair dealing by Beijing and create a specialized task force to counter the Asian giant’s “increasingly sophisticated unfair trade practices.”
Major US trade associations, meanwhile, wrote US House Speaker Nancy Pelosi, House Majority Leader Steny Hoyer and House Minority Leader John Boehner to warn the bill could spark a “counterproductive” trade feud that could cost US jobs.
“This legislation will do more harm than good to job creation and economic growth at a time when we need both dearly,” the groups, many with sizeable interests in China, said in a letter.
Schumer scoffed, saying that “unfair” Chinese practices meant “American companies already are fighting a war for survival.”