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Senate passes bill to sanction China over currency

Oct. 12, 2011 - 09:10 By

WASHINGTON (AP) _ The Senate voted Tuesday to threaten China with higher tariffs on Chinese products made cheap through an artificially undervalued currency, which lawmakers blame for destroying American jobs. The House of Representatives, though, is unlikely to take up the bill, which some American businesses warn could trigger a trade war.

The 63-35 vote showed a broad bipartisan consensus that it is time to end diplomatic niceties with China and confront it over its aggressive trade policies.

``There are always people who don't want to stand up to China, and I think they are, frankly, undercutting our ability to stop the hemorrhaging in our manufacturing jobs,'' said Democratic Sen. Sherrod Brown.

``I understand that some on Wall Street don't like this bill,'' said Sen. Jeff Sessions, a Republican. ``They are wrong about this.''

Still, the bill could die in the House, where a companion measure has the sponsorship of more than half the members but lacks the support of the majority Republican leadership.

House Speaker John Boehner, the top Republican, like the many large multinational companies that oppose the legislation, has said it would be dangerous to dictate another country's currency policies, and he can prevent the bill from ever being considered.

House Majority Leader Eric Cantor, also a Republican, said Tuesday that the White House should make its position clear before the House acts. The White House and President Barack Obama have not come out against the bill but have shown they are uncomfortable with it, saying they are concerned about any legislation that might violate international trade rules.

Advocates for the bill say it will make American goods more competitive and support more than 1 million new jobs. Critics warn that it will provoke Chinese retaliation and hurt Americans in one of their fastest-growing markets.

Regardless of the outcome, the debate and the vote are giving senators a chance to make clear to the Chinese their frustrations over trade policies that have seen China's trade surplus with the United States go from $10 billion 20 years ago to $273 billion last year, delivering painful blows to U.S. manufacturers and their employees.

``This is a country manipulating its currency for an advantage in the export market,'' said Republican Sen. Lindsey Graham of South Carolina. ``The Chinese manipulation of the yuan has cost this country at least 2 million jobs _ 41,000 in South Carolina _ and it is an unfair trade practice in another name.''

The vote came as Congress prepared to complete work on a package of free trade agreements that is also seen by their backers as removing barriers to American exports and promoting job growth.

Both the House and Senate are expected to vote Wednesday on trade agreements with South Korea, Colombia and Panama.

The Chinese currency, the yuan, is undervalued against the dollar by 25 to 30 percent, according to most estimates, with some economists putting the difference at up to 40 percent. That means that Chinese goods sold in the United States have a 25 to 30 percent price advantage, while U.S. items sold in China become that much more expensive.

Brown, whose state of Ohio has been hit hard by Chinese competition, cited a tool and die shop in Brunswick, Ohio, that was about to sign a $1 million contract until the Chinese came in at the last moment with a bid 20 percent lower.

``That meant I don't know how many jobs that didn't stay in America but went to China and that 20 percent was given to them because of currency,'' he said.

The legislation would set in motion the imposition of higher tariffs on a country _ China is not specifically mentioned in the bill _ should the U.S. Treasury Department decide that its currency is ``misaligned'' and the country does not act to correct it. Currently, Treasury must resolve that a country is willfully manipulating its currency, a higher bar to reach, before sanctions can be considered.

The bill also makes it easier for specific industries to petition the Commerce Department for redress if they believe an exchange rate is giving a foreign competitor the equivalent of an export subsidy.

The drive to punish China for its currency practices has been going on for years, led by conservatives such as Graham and Democratic liberals such as Brown and Chuck Schumer of New York. They have generally been discouraged by the Obama administration, and the Bush administration before it, which cautioned against unilateral sanctions and appealed for time to bring about Chinese cooperation through diplomatic channels.

There has been some appreciation of the yuan in the past year, but not enough to satisfy those who say it is still heavily undervalued in China's favor.

The Chinese have made their opposition to the Senate bill clear, saying in numerous statements that the trade imbalance is a result of U.S. economic policies and not the exchange rate, and that unilateral actions against China could damage the entirety of U.S.-China relations. Those range from efforts to protect better U.S. intellectual property rights in China, ending the theft of American technology, assuring the security of Taiwan and keeping the Korean Peninsula peaceful.

But Schumer said getting China to play by the rules ``will not happen by persuasion, by multilateral talks, by wishing it were so, or even by the healing of time. It will only happen if America stands up for itself, for fairness, for equal treatment.''

Opponents argue that the currency sanctions would do little to help the U.S. job market because more expensive Chinese goods would simply be replaced by goods from other low-wage countries such as Vietnam and Bangladesh. And they say companies such as Wal-Mart would continue buying Chinese items because they are deeply involved in investment in China, a fast-growing export market.

But the Alliance for American Manufacturing, a labor-management partnership that supports the bill, says a 28.5 percent appreciation in the yuan would create 2.25 million American jobs and reduce the annual trade deficit by $190.5 billion.

"China responds to consequences, and this legislation will make a real difference for American workers and businesses,'' said the group's executive director, Scott Paul.


美상원, 中 위안화 평가절하 보복 법안 가결

미국 상원이 11일(현지시간) 중국 위안화 환율 평가절하 에 대응해 보복 관세를 부과하는 법안을 통과시켰다.

이 법안은 저평가된 환율을 부당한 보조금으로 간주해 보복 관세를 부과하도록 하고, 미 기업과 노동조합이 상무부를 상대로 외국 정부의 환율조작 의혹 조사를 요 구할 수 있도록 하는 것을 골자로 하고 있다. 

이날 미 상원은 이 같은 내용의 법안을 찬성 63표, 반대 35표로 통과시켰다.
이에 따라 해당 법안은 앞으로 하원 표결을 거쳐 버락 오바마 대통령의 최종 서 명을 받으면 효력을 발휘할 수 있게 된다. 

린지 그레이엄(공화·사우스캐롤라이나) 상원의원은 "중국이 잘못을 저질렀을 때 우리가 당하고만 있지는 않을 것이라는 점을 이번 표결이 분명히 보여준다"고 의 미를 부여했다.

이 법안에 찬성하는 미 의원들은 중국의 위안화 환율이 40%까지 평가절하돼  중 국산 수입품이 불공정한 혜택을 누리고 미국의 고용시장에도 악영향을 미친다고  주 장해왔다. 

이에 대해 앞서 힐러리 클린턴 국무장관도 법안의 통과 여부는 알 수 없지만, 법안의 상정이 "미국 국민이 느끼는 좌절감을 반영한다"고 말했었다.
그러나 해당 법안을 반대하는 목소리도 만만치 않다. 

반대론자들은 이 법안이 처리되면 중국과의 외교적 마찰이 불가피하며, 설사 위 안화가 절상되더라도 미국이 아닌 베트남과 말레이시아 등의 국가들이 제조업계와 고용시장 부양 효과를 누리게 될 것이라고 지적한다. 

이 같은 우려 속에 백악관과 미국 주요 경제단체 및 공화당 지도부가 소극적인 태도를 보이고 있어, 해당 법안이 공화당이 장악한 하원을 통과하기는 어려울  것이 라는 전망이 나오고 있다. 

앞서 존 베이너 미 하원의장(공화)은 "미 의회가 중국의 화폐 가치를 놓고 보복 하는 법안을 통과시키는 것은 매우 위험한 일"이라며 반대 의사를 밝힌 바 있다.