WASHINGTON — The House Ways & Means Committee approved a bill today that targets China’s currency policies.
The bill, which advanced in a voice vote, would allow the Commerce Department to treat currency manipulation as an illegal export subsidy, raising the possibility of imposing punitive tariffs on Chinese imports because of that nation’s allegedly undervalued currency.
“China’s exchange rate policy has a major impact on American businesses and American jobs, which is what this is all about,” said committee chairman Sander Levin (D., Mich.). “For years, U.S. workers, businesses and farmers have been held to a competitive disadvantage because of China’s intervention to keep the price of Chinese goods to the U.S. artificially low and of U.S.-produced goods to China artificially high.”
The U.S. textile industry supports the legislation, arguing that China’s undervalued currency has put its products at a competitive disadvantage. Importers oppose the legislation over concerns that it will run afoul of the World Trade Organization rules and invite retaliation from China against U.S. exports and lead to higher prices on the goods the industry makes in China and exports to the U.S.
The legislation next moves to the full House for a vote. House Speaker Nancy Pelosi has pledged her support of the bill, but there is little time left before the House adjourns next week for the midterm elections. Majority Leader Steny Hoyer has said the House will only be in session next Wednesday and Thursday before adjourning.
The prospects for the currency legislation in the Senate are uncertain. There has been no committee action and the Senate will also adjourn shortly for midterm election campaigning.