Schumer Optimistic on China Currency Measure
Sen. Charles Schumer predicted success in a Monday vote to take up legislation that would crack down on Chinese currency manipulation.
“We expect a strong bipartisan vote on Monday night, and it will be a bellwether for what we expect to be an overwhelming vote in favor of final passage later in the week,” the New York Democrat said in a conference call today.
The bill is supported by a coalition of Senators from manufacturing states, as well as those from some Southern states who see the measure as a way to halt job losses.
Joining Schumer on the call and in support of the bill were Democratic Sens. Debbie Stabenow (Mich.) and Bob Casey (Pa.) as well as Sen. Jeff Sessions (R-Ala.).
Sessions urged his fellow Republicans in the other chamber to take up the measure, although the bill’s fate in the GOP-led House appears uncertain.
“I think the message is that this country cannot allow the loss of a single job as a result of unfairness in our trading partners,” Sessions said.
The United States has a growing trade deficit with China and the disparity cost about 2.8 million jobs from 2001 to 2010, according to a report released last week by the liberal Economic Policy Institute.
The report alleges that China’s currency manipulation has made the trade deficit worse.
“Increases in U.S. exports tend to create jobs in the United States, and increases in imports tend to lead to job loss,” the report said. “Thus, a growing trade deficit signifies growing job loss. The trade deficit with China is exacerbated by the currency manipulation. Because China has pegged its currency to the U.S. dollar instead of allowing it to fluctuate freely, the yuan has remained artificially low, effectively subsidizing Chinese exports and artificially raising the cost of U.S. exports.”
The conservative Club for Growth has come out against the China currency measure, arguing it could spark a trade war, which would be worse for the economy than the trade deficit.
“This proposal would make it easier for the government to slap punitive tariffs on ‘non-market’ economies — in particular China — if an exporting country’s currency is considered misaligned against the U.S. dollar,” the group warned in a recent release. “This is a disastrous proposal that would increase taxes on American consumers, stall the economic recovery, and spark an ugly trade war that would benefit no one.”
The group told lawmakers that it intends to score Monday’s vote.
The Obama administration has not taken a position on the measure.
Schumer said the bill has addressed some White House concerns by using the term “misaligned” to describe the yuan, rather than the more inflammatory “manipulated” — a move that he said was designed to make the bill World Trade Organization-compliant.
“Many of us on both sides of the aisle were disappointed when the administration has repeatedly refused to label China a currency manipulator,” Schumer said, “but now we are using misalignment. … This is a WTO term and they said the are looking at it.”
Schumer also said he hopes support from GOP presidential candidate Mitt Romney will help get the bill through Congress.
“You probably have seen positive comments from some of the Republican presidential candidates about doing something about China currency manipulation,” Schumer said. “Democrats and Republicans both agree there is no better step to put Americans back to work than to pass this bill and you see that in the bipartisan coalition we have.