U.S. Senator Charles Schumer, D-NY, is greeting Chinese President Hu Jintao's visit to the U.S. this week with a promise of legislation to impose tariffs on Chinese goods to combat China's alleged currency manipulation.
The U.S. can't afford to keep losing jobs and wealth because China manipulates its currency, Schumer said today, according to published reports. China's currency is like a boot to the throat of our economic recovery.
According to Schumer's office, the legislation he intends to introduce is identical to his Currency Exchange Rate Oversight Reform Act of 2010 proposal, which passed the House but died in the Senate.
The measure would allow the Treasury Department to identify a country as a currency manipulator without having to show that the manipulation was intentional; establish consequences against the offending country if it doesn't take steps, with the sanctions becoming more severe over time; and permit the Department of Commerce to use existing anti-dumping laws and impose tariffs on designated countries to counter the effect of currency manipulation on pricing.
By keeping its currency artificially low, China makes its exports to the United States less expensive than comparable U.S. products, Schumer said, while also making U.S. exports to China more expensive than Chinese goods. These factors make it more difficult for the U.S. to compete globally with China.
China's alleged manipulation of its currency has been a sore spot in U.S./Sino relations. But the Obama administration, like the Bush administration before it, has been reluctant to directly confront the world's second largest economy on the issue.
In April, 2010, the administration again postponed its report on manipulation of the yuan to give China and the U.S. further chances to resolve their differences without so drastic a step, administration officials said.
But Schumer's approach, according to Schumer is if you don't play by the rules, we're going to make you play by the rules.
Sens. Debbie Stabenow, D-MI and Bob Casey, D-PA, said they support Schumer's measure.
President Hu, in written responses to U.S. media outlets over the weekend, said the two countries should look for common ground on issues like terrorism, nuclear proliferation and clean energy.
While calling for the powers to abandon the zero-sum Cold War mentality, Hu brushed aside criticism of China for currency manipulation and said China has moved to make its currency convertible on international markets.
Meanwhile, U.S. Secretary of State Hillary Clinton recently aimed criticism at China's human rights policy.
We reiterate our call for the release of Liu Xiaobo and every other political prisoner in China, Clinton said.
The Obama administration reportedly will push the human rights issue more than the currency issue in the upcoming talks between the two presidents.