WASHINGTON, Feb 25 (Reuters) - A group of 15 U.S. senators on Thursday insisted that China's currency practices are effectively a subsidy, and urged Commerce Secretary Gary Locke to take action.
There can be no doubt that China's policy of large-sale intervention in the exchange markets and the significant undervaluation of its currency acts as a subsidy to Chinese exports, the senators said in a letter.
A number of manufacturers have brought cases in recent years asking the Commerce Department to treat China's currency practices as a subsidy, including a pending case brought by U.S. paper companies.
The Commerce Department has declined those requests, saying that currency manipulation does not meet the technical definition of a subsidy that can be offset under U.S. law.
In their letter, the senators strongly disagreed.
The bedrock of our economic system is fairness and China's currency practices violate that principle in every single way. ... The Commerce Department has yet to take this issue seriously and we must keep pressing the agency until it does the right thing, Senator Charles Schumer, a New York Democrat, said in a statement.
Because the yuan is artificially devalued by 15-40 percent below its true market value, American companies are losing market share for an unacceptable reason, Senator Lindsey Graham, a South Carolina Republican, said. (Reporting by Doug Palmer, Editing by Andrea Ricci and Leslie Adler)