Sen. Schumer, 34 Other Lawmakers File Petition Calling For Action Against China's Unfair Currency Manipulation
Another Strong Message Sent to China on Heels of an Overwhelming Senate Vote to Consider Schumer-Graham China Fair Trade BillFiling Today Would Force U.S. Trade Rep. to Initiate Case at the WTO
Senator Charles E. Schumer (DN.Y.) and Rep. Sander Levin (DMI) joined by 33 other members of the Senate or House of Representatives today filed a petition under section 301(a) of the Trade Act of 1974. The petition calls on the Administration to take concrete action against China's currency manipulation. Specifically, the petition demands that USTR take action by filing a WTO case against China if it does not immediately eliminate the undervaluation of its currency. Such action would create a formal process and timetable to ensure that China ends its unfair currency manipulation. A similar petition was filed with the USTR last September, but was rejected. The petition was signed by 23 members of the House of Representatives and 12 members of the Senate, including Republican, Sen. Lindsey Graham (SC).
"Teddy Roosevelt once advised that the best negotiating strategy was to, 'speak softly and carry a big stick'," Sen. Schumer said. "Taking that advice, Congressman Levin and I have relied on the Administration to use quiet encouragement in an effort to help China's leadership see the light. That has proven to be a great failure over the past year and it is time to bring out the big stick and enforce U.S. trade laws."
By rigging its currency between 15 and 40 percent below its appropriate value, China is giving a subsidy to its imports to the United States and imposing a direct cost on U.S. exporters to China. This unfair advantage has hurt U.S. manufacturers, workers, and farmers and contributed to the U.S. trade imbalance with China growing by 50% since 2001, to a record $120 billion.
The SchumerGraham China Free Trade bill, which was offered as an amendment to the State Department budget got an overwhelming vote in the Senate last week. It allows for a 180 day negotiation period between the US and China to revalue its currency, if the negotiations are not successful, a temporary across the board tariff of 27.5% will be applied to all Chinese products entering the United States a penalty that corresponds to their estimated currency advantage. Since economists estimate that China undervalues its currency between 15 percent and 40 percent, 27.5% represents the midpoint range. Furthermore, if the President determines that at the end of the negotiation period that China has developed and started actual implementation of a plan to revalue its currency, he may delay imposition of the tariff for another 12 months.
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