Currency Reform For Fair Trade Act

Floor Speech

Currency Reform For Fair Trade Act

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Mr. HENSARLING. I thank the gentleman for yielding.

Mr. Speaker, as I look at the available evidence, I believe that the preponderance of the evidence does show that China is manipulating its currency. So I don't question the problem; I question the remedy. And I question whether or not punishing American consumers is the right remedy to apply to this situation. I believe that, ultimately, if this legislation is enacted, that is what will happen.

We know already--we don't know what the estimates are, 5 to maybe 30 percent--that the renminbi may be overvalued. And China should let their currency float.

It is wrong what they're doing. They are hurting their own people by doing what they're doing.

But in addition, Mr. Speaker, one thing I do know they are doing is they are subsidizing goods to the American people at a time when many family budgets are being strained. The available evidence shows that if this was passed, if actually the renminbi was revalued, that prices for many of these Chinese goods may go up 10 percent. A pair of shoes that a mother needs for her child to go to school, maybe it is a pair of glasses, maybe it is toys at Christmas, all become more expensive.

So to some extent there is a question: Should we pass a law, pick winners and losers between manufacturers and consumers? Is that something we should be doing? I am not sure that it is.

In addition, Mr. Speaker, we all know our history. We know that presently we are still mired. Whether or not some Bureau economist tells us we are out of a recession, we know that people in our districts continue to suffer through probably the greatest economic crisis we have seen since the Great Depression. One of the most exacerbating factors happened to be the Smoot-Hawley tariff. I fear a trade war.

Now, some say we are already having a trade war. Well, by historic standards, we are probably having a trade skirmish. But we know that already the administration last year elected to impose tariffs on Chinese tires. And, guess what? They imposed tariffs on our poultry, one of the few areas where we actually had a favorable balance of trade, and so import tariffs up to 105 percent on U.S. exports of poultry. So any type of jobs that may be gained in manufacturing just might be lost in agriculture or some other area.

I am not convinced that the proponents of this bill have made the case that, on net, this would even create more jobs in America. It certainly would create more in one sector than another. But, again, precipitating a trade war at a time when we are in tough economic times, making it more difficult for consumers to afford the items they need to provide for their families, I think is unwise public policy. So I would urge defeat of this legislation.

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