Stabenow, Specter: China Continues to Deny Practice of Currency Manipulation
Today, U.S. Senators Debbie Stabenow (D-MI) and Arlen Specter (D-PA) pushed back on a statement from the Chinese government that the value of the Chinese Yuan was at a reasonable level and the country was not pursuing a trade surplus with the United States. Senator Specter is the latest co-sponsor of Senator Stabenow's Currency Reform for Fair Trade Act. Stabenow's legislation provides a clear definition and methodology for determining currency manipulation which will help prevent foreign countries from gaining an unfair competitive advantage at the cost of American jobs. The bipartisan legislation is also co-sponsored by Senators Sherrod Brown (D-OH), Jim Bunning (R-KY), Bob Casey (D-PA), Russ Feingold (D-WI), Carl Levin (D-MI), and Olympia Snowe (R-ME).
"Yesterday, President Obama stated that his administration is going to get much tougher on countries like China that manipulate their currency and put Americans out of work," said Stabenow. "As a long-time proponent of a level playing field for our manufacturers and businesses I could not agree more. Unfortunately, China continues to deny that it has an unfair trade advantage and refuses to end the practice of currency manipulation. It is time to pass my legislation which will ensure that our laws provide mechanisms to punish countries for manipulating their currency, so U.S. workers are not put at a competitive disadvantage."
"We have lost 2.3 million jobs as a result of the trade imbalance with China from 2001 and 2007. China continues to violate international law with subsidies, dumping and currency manipulation; it's really a form of international banditry," Specter said. "I am pleased to cosponsor this legislation with Senator Stabenow because it marks an important step in putting the United States on a level playing field and chips away at China's unfair trade advantage."
Provisions in the Stabenow legislation:
* Ensures that standard remedies are put in place to offset the subsidy effects when a government undervalues its currency. Currently, such U.S. trade remedies have not yet been applied.
* Provides an explicit definition of when currency misalignment occurs and directs the U.S. Department of Commerce to measure whether a country's currency is fundamentally misaligned. These calculations will be public and will use reliable data available from the IMF as well as the two primary methodologies and guidelines that the IMF follows in its computations of exchange-rate misalignment.
* Provides a solution for any currency undervaluation. The intervention can be offset by means of either countervailing duties or antidumping duties. These remedies are imposed only when the U.S. International Trade Commission determines that the unfair practice has caused or threatens to cause material injury to U.S. companies and workers. Also, it focuses on the effect or impact of the exchange-rate misalignment regardless of the purpose. Imposition of only one or the other remedy of countervailing and antidumping duties will be allowed to prevent "double-counting."
* Directs the U.S. Department of Commerce to treat currency undervaluation as a prohibited export-contingent subsidy.