Senate Passes Currency Manipulation Legislation
The ball is now in House Speaker John Boehner’s (R-OH) court after the senate passed a bill last night that cracks down on China’s illegal practice of undervaluing its currency to gain an upper hand in international trade.
Sixteen Republicans joined forces with most of the Democratic caucus to pass the legislation in a 63-35 vote. Four Democrats and Independent Joe Lieberman (CT) voted against the measure.
The bill will now move on to the house, where it has widespread, bipartisan support. However, Boehner has called the bill “dangerous” and has said that he has no intention of bringing it to the floor.
Senate Democrats are hoping that their action will put pressure on Boehner to bring the bill to the floor for a vote.
“The Senate has put the Chinese on notice: Stop your cheating that is costing our country jobs or you will face the consequences,” Sen. Chuck Schumer (D-NY) said in a statement after Tuesday’s vote.
“We believe the momentum from the Senate vote now leaves the House no choice but to act on this bill.”
House Republicans, however, are pinning their hopes to avoid a potentially embarrassing vote on the popular measure by pointing out that the White House does not support the measure. Last year, 99 house Republicans supported a similar piece of legislation.
“I would like to hear from those who are on the front line of this relationship with China what the concerns are,” House Majority Leader Eric Cantor (R-VA) said, according to The Washington Post.
“It would seem to me that it’s a big deal when you’re talking about a trading partner like China, if you do this without the input of the White House.”
The bill would allow the U.S. to treat China’s artificially undervalued currency as an illegal subsidy. To counteract the subsidies, the U.S. could then impose steep anti-dumping and countervailing duties on Chinese imports.
However, the White House, along with numerous business groups opposes the legislation. They claim that it could spark a trade war between the U.S. and China.
But as Clyde Prestowitz of Foreign Policy points out, the U.S. is already in a trade war with China.
“The charge of trade war also rings hollow. If the Senate is passing a bill aimed at redressing the effects of policies and practices that everyone agrees are in contravention of the spirit and letter of global trade rules and that are also harmful to important members of the global economy, how can that be a declaration of war?” Prestowitz asked.
“Indeed, wouldn’t it be more accurate to describe the currency manipulation policies and practices as a declaration of war in view of the fact that they were implemented as a matter of strategic economic policy and without any outside provocation?”