Under election-year pressure over trade-driven jobs, U.S. senators unveiled legislation on March 16 that would impose tough new penalties on China if it failed to revalue its currency. The legislation, which enjoys support from both sides of the political aisle, would punish currency manipulation as an unfair subsidy and could trigger a set of retaliatory U.S. action.
The move came as lawmakers in Washington stepped up criticism of China ahead of November mid-term US elections, accusing Beijing of securing an unfair edge in trade by keeping the yuan artificially low. It also follows Chinese Premier Wen Jiabao strong statement at the weekend that Beijing would resist any foreign pressure for a stronger yuan.
"When Premier Wen said that China's currency is not overvalued two days ago, that was the last straw and here we are to tell them we are going to force you to do it -- plain and simple," said Democratic Senator Chuck Schumer as he unveiled the legislation at a news conference.
"There is no bigger step that we can take to promote job creation here in the U.S. than to confront Chinese currency manipulation," said the senator as he referred to the double digit unemployment crisis dogging the United States.
Republican Senator Sam Brownback said he expected a "huge vote," both in the House of Representatives and the Senate, on the legislation.
This will enable President Barack Obama's administration "to do what it needs to do," Brownback said.
On March 15, a group of 130 Democratic and Republican lawmakers called on U.S. Treasury Secretary Timothy Geithner to brand China a currency manipulator in a report due next month, saying Beijing was in effect subsidizing exports. "The impact of China's currency manipulation on the U.S .economy cannot be overstated," the lawmakers said in the letter submitted to Geithner and U.S. Commerce Secretary Gary Locke.
President Obama last week renewed his call to China to embrace a "market oriented" exchange rate, upping U.S. pressure on the yuan currency at a time of turmoil in Washington's delicate relations with Beijing.
View article on one page