A bipartisan group of 101 US lawmakers in the House of Representatives launched a new bid on Thursday to pass legislation aimed at pressuring China to let its yuan currency rise in value.
The same proposals cleared the House last year, but died in the Senate. If approved this time, they would clear the way for the Commerce Department to treat currencies deemed to be undervalued as an illegal subsidy under US trade law.
That would allow companies, on a case-by-case basis, to seek higher countervailing duties against imports from China that compete with US production.
US congressional anger at China over what lawmakers see as deliberate undervaluation of the yuan was fanned anew on Friday last week by a Treasury Department decision not to declare China a currency manipulator.
“What we are doing is adding weapons” to the US government’s arsenal of tools to deal with currency manipulation, said Representative Sander Levin, a Democrat who spearheaded last year’s drive for the bill when he was still chairman of the House Ways and Means Committee.
Senator Sherrod Brown, a Democrat, said he and Senator Olympia Snowe, a Republican, were introducing a similar bill in the Senate.
“Currency manipulation plain and simple is a form of subsidy ... When China manipulates its -currency, that’s not competing, that’s cheating,” Brown said.
Final US trade figures for last year due out yesterday were expected to show the trade deficit with China surpassed the record of US$268 billion set in 2008.
Chinese President Hu Jintao (胡錦濤) faced pressure on the issue when he visited Washington last month, but Beijing has said it would move at its own pace to revalue the yuan.
The new US push came as China’s central banks appeared to send a strong signal that the government was more willing to let its yuan currency appreciate by fixing its daily mid-point trading range at a record high 6.5849 to the US dollar.
The yuan closed at 6.5865 against the US dollar, up from 6.5938 on Wednesday. It has now risen 3.64 percent since China ceased pegging its value to the US dollar in June last year.
However, US critics say it is still undervalued by as much as 15 to 40 percent, giving Chinese companies an unfair advantage in international trade.
With congressional elections looming, the House passed the Currency Reform for Fair Trade Act in September by a wide margin of 348-79, but the Senate never took up the measure and it died when Congress adjourned at the end of the year.
Republicans won control of the House in the November elections and the new leadership team has made clear passing a China currency bill is not on their to-do list this year.
Any House bill aimed at China’s exchange rate practices would have to start in the Ways and Means Committee, where Republican Dave Camp is now chairman.
“This particular bill is not Chairman Camp’s primary focus or priority when it comes to China relations,” a spokesman for Republicans on the Ways and Means Committee said.
US President Barack Obama’s administration never took a public position on last year’s bill and a top Treasury Department official on Thursday shed little light on its views.
Asked about the new push in Congress, Treasury Under Secretary for International Affairs Lael Brainard said lawmakers had the same goals as the administration — eliminating the yuan’s undervaluation.