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Congress Again Says It May Act To Counter China's Yuan Policy
ASSOCIATED PRESS April 8, 2005
WASHINGTON – For the second time in two days, Congress gave notice to both China and the Bush administration that it will take action if nothing is done about the undervalued Chinese currency that gives Chinese goods an advantage over American competition.
Rep. Tim Ryan (D., Ohio) introduced legislation yesterday that defines exchange-rate manipulation as a prohibited export subsidy and sets guidelines for U.S. agencies to sanction China and protect U.S. industries. Also sponsoring the bill is California Republican Duncan Hunter, chairman of the House Armed Services Committee.
The measure was introduced a day after the Senate showed strong support for a proposal to place a 27.5% tariff on all Chinese products if China doesn't revalue its currency. The amendment -- offered to a bill authorizing State Department and foreign-aid programs -- cleared a key procedural obstacle on a 67-33 vote. Sponsors of the proposal said yesterday they will withdraw the amendment, after the Senate leadership agreed to provide for an up or down floor vote on the issue by July 27.
The administration has pressed China to let the yuan float against the dollar, but has declined to pursue trade action, saying it was preferable to negotiate with Beijing. Yesterday, Treasury Secretary John Snow, in an exchange with Sen. Charles Schumer (D., N.Y.) at a Senate hearing, said diplomacy was the best means of moving China on the currency issue and that Mr. Schumer's proposal for the 27.5% tariff "will be counterproductive."
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<http://online.wsj.com/article_print/0,,SB111291522024701392,00.html >