The US Congress moved Friday to open the way for retaliation against China over its currency, warning that it has lost patience with quiet efforts to press Beijing to let its yuan appreciate.
One day after President Barack Obama pressed Chinese Premier Wen Jiabao on currency in a meeting in New York, Obama’s allies in Congress approved a measure that accuses Beijing of killing US manufacturing jobs with its yuan.
The House Ways and Means Committee, which writes tax laws, voted to expand the powers of the Commerce Department to allow it to impose tariffs when another nation is found to be manipulating its currency’s value.
Under longstanding regulations, the Commerce Department can only impose tariffs on foreign goods if the producer country directly subsidizes an export.
The committee sent the bill to the full House, which is expected to vote on the measure in the coming weeks. Critics accused Obama’s Democratic Party of rushing the measure in a last-ditch attempt to win labor union support ahead of November 2 elections, in which the wobbly US economy is the headline issue.
Representative Charles Rangel, a Democrat from New York, scoffed at claims of electoral calculations and said that the United States needed to act to restore its manufacturing industry and halt the flood of inexpensive imports.
“We’re sending a message to communist China that we will not tolerate unfairness in trade, notwithstanding the fact that we are the beneficiary of their cheap slave labor,” Rangel said.
Representative Sandy Levin, a Democrat from economically struggling Michigan, said that China’s exchange rate policy “has a major impact on American businesses, and American jobs, which is what this is all about.”