By Mark Drajem and Peter Cook
President Barack Obama needs to make sure China lives up to its commitment to raise the value of its currency, Senator Sherrod Brown said.
"China has been great at gaming the system," on trade, Brown, an Ohio Democrat, said today in an interview on Bloomberg Television. The president "shouldn't just check the box" and view the matter as closed, he said.
Legislation that would let U.S. companies get higher tariffs on imports to compensate for a weak Chinese currency is still necessary, Brown, a cosponsor of the measure, said in an interview at Bloomberg's Washington office. China said on June 19 that it was lifting a two-year policy of pegging its currency, the yuan, to the U.S. dollar.
"The pressure still needs to be on them from Congress," Brown said. "If we move forward on an amendment on currency on the Senate floor, our chances for passage are pretty good."
Brown criticized China for announcing on June 19 that it would end a peg to the dollar, and then adding the next day that any appreciation of the yuan would not be rapid.
"It is sort of par for the course for what we've seen with China trade issues," Brown said. The administration's "response to this will be very, very interesting."
The yuan declined the most since December 2008 today on speculation the central bank will limit gains. The yuan weakened 0.23 percent to 6.8136 per dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade system. Yesterday it climbed the most since a July 2005 revaluation.
Brown said he also is watching negotiations between the House and Senate on a financial regulation measure, and is concerned that tough rules on banks and derivatives could be stripped out of the measure.
"I am concerned about what happens with derivatives," Brown said.