Ninety-three US lawmakers have signed a letter urging Democratic leaders in the US House of Representatives to schedule a vote on a bill to get tough with China over its currency exchange rate practices, a lawmaker’s office said on Monday.
Many members of US Congress believe China undervalues its currency by as much as 40 percent to give Chinese companies an unfair price advantage in world trade.
With the US unemployment rate at 9.6 percent and the US trade deficit with China rising rapidly again this year, House Democratic leaders have come under growing pressure to address the concern.
“So far we have 93 members signed on to the letter,” a spokeswoman for US Representative Tim Ryan told Reuters in an e-mail ahead of congressional hearings today and tomorrow to examine what action if any the US should take to deal with China’s exchange rate policies.
Ryan is the lead Democratic sponsor of the Currency Reform for Fair Trade Act, which the lawmakers said in their letter would allow the US Department of Commerce to impose countervailing and anti-dumping duties on “injurious imports from any country that persistently undervalues its currency.”
He will testify on the bill today, when the House Ways and Means Committees begin the first of two days of hearings on China’s currency practices.
The panel will also hear from three other House lawmakers, as well as Leo Gerard, the president of the United Steelworkers union; Dan DiMicco, president of Nucor Corp, a top US steel producer; and several trade policy experts.
Tomorrow, US Secretary of the Treasury Timothy Geithner will testify before both the US Senate Banking Committee and the House Ways and Means Committee on China’s currency.
Geithner and US President Barack Obama have disappointed many in Congress by failing to formally label China a currency manipulator in three semi-annual Department of the Treasury reports since Obama took office in January last year.
Lawmakers are expected to grill Geithner on what the administration will say in the next report due on Oct. 15 and whether it supports legislation to deal with the issue.
The yuan’s appreciation has quickened in recent days, a move some analysts see as an effort by Beijing to calm the political waters in Congress.
However, it has still risen less than 1 percent since China loosened a peg to the US dollar in June.
Lawmakers often circulate a letter to persuade the leadership to schedule a vote on a bill.
A Democratic aide said House Speaker Nancy Pelosi still has not decided whether to set a vote on the bill, which is expected to irritate Beijing if it becomes law.
A group of senators led by Democrat Charles Schumer are also pushing for legislation.
However, efforts to deal with the issue in Congress have faltered in the past.
The letter crafted by Ryan and US Representative Tim Murphy, the lead Republican sponsor, spells out why they think legislation is needed and defends it against charges it would put the US in violation of global trade rules.
“The bill has been written to be consistent with US rights and obligations under the agreements of the World Trade Organization and the International Monetary Fund,” the lawmakers said.