[lbo-talk] WSJ: Congress Threatens To Take Action It Probably Can't Take

joanna bujes jbujes at covad.net
Fri Apr 8 12:05:57 PDT 2005


This complaint about the Yuan being undervalued seems weird to me. The Yuan is pegged to the dollar. If the Yuan is "undervalued" does this not proceed from the fact that we are printing too many dollars? Why is it necessarily their "fault" that the Yuan is "undervalued." ?

Joanna

Dwayne Monroe wrote:


>Specifically, impose a heavy tariff on Chinese imports. As I see it, Americans
>threatening to punish China by making their imports more expensive is like a
>boxer showing his opponent how tough he is by hitting himself in the face.
>
>.d.
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>...
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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."
>
>
>source --
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><http://online.wsj.com/article_print/0,,SB111291522024701392,00.html >
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