A day after the US Senate passed legislation to punish China for its alleged currency manipulation, US Speaker of the House John Boehner signaled on Wednesday he would block the bill to prevent a “trade war.”
“Given the volatility in the world markets, given the uncertainty about the world economy, for the Congress of the United States to be taking this step at this moment in time poses a very severe risk of a trade war,” he said.
Boehner faces mounting pressure to bring up the bill in the House of Representatives, where enough of his fellow Republicans have joined Democrats in backing the proposal that it would likely pass.
The bill, powered by a tide of US voter frustration at a sour economy and high unemployment ahead of next year’s November elections, envisions retaliatory duties on Chinese exports if the value of the yuan is unfairly “misaligned.”
Beijing has denounced it as “a ticking time bomb” that threatens to blow up economic ties between the economic superpowers. Parts of the US business community opposed it and the White House has criticized it.
Boehner said he was “concerned” about China’s currency policy, but said those worries were outweighed by “grave concerns” that the measure could trigger a destructive economic feud between the two economic superpowers.
And in an apparent bid to shift the volatile issue to the White House, Boehner pushed US President Barack Obama to take a formal position on the legislation.
“While the president is out campaigning instead of governing, it’d be nice for the president of the United States to make clear what his position is on this China currency bill,” he told reporters.
Obama spokesman Jay Carney said the White House was working with key lawmakers to address “concerns” about whether the bill could fall afoul of Washington’s international trade obligations.
“We’re in the process of discussing with Congress those issues. And if this legislation were to advance, you know, we would expect those concerns to be addressed,” he said.
However, “we share the goal of the legislation in taking action to ensure that our workers and companies have a more level playing field with China,” Carney said.
Later, the House of Representatives voted against attaching the bill to legislation to enact the long-stalled US free-trade deal with Colombia in a symbolic vote conceived by Democrats to embarrass Republicans.
Just four Republicans joined 188 Democrats to vote yes, while 235 Republicans and one Democrat rallied to beat back the proposal by a 192-236 margin that does not preclude future action on the bill — or future political headaches.
Obama, his re-election bid weighed down by the sagging US economy and 9.1 percent unemployment, is caught between wanting to look tough on China and hoping to avert a trade war that could makes things worse.