March 24, 2010 - Full Committee Hearing on China’s Exchange Rate Policy - 1100 Longworth House Office Building - at 10:00 AM
FOCUS OF THE HEARING:
Economists generally agree that the Chinese currency (the renminbi – “RMB” – or “yuan”) is substantially undervalued as a result of market intervention by the Government of the People’s Republic of China. This policy artificially raises the price of imports into China and suppresses the price of exports from China. The purpose of this hearing is to consider: (1) the immediate and long-term impact of China’s exchange rate policy on the U.S. and global economic recoveries and, more specifically, on U.S. job creation; and (2) steps that could be taken to address the issue.
link ~ March 24th ~ Hearing on China’s Exchange Rate Policy
March 16, 2010
Sen. Stabenow, Colleagues Announce Bipartisan Legislation to Stop Countries Like China from Cheating and Costing Michigan Jobs
March 16, 2010 -- WASHINGTON -- U.S. Senator Debbie Stabenow (D-MI) today announced bipartisan legislation to penalize countries like China that undervalue their currency to artificially discount their foreign products. This form of cheating creates an unfair advantage over U.S. products, costing us jobs.
The Currency Exchange Rate Oversight Reform Act will require the U.S. Departments of Treasury and Commerce to take action to support American businesses and workers. The legislation includes provisions from Senator Stabenow’s Currency Reform for Fair Trade Act, which she introduced last year.
The Currency Exchange Rate Oversight Reform Act was announced by U.S. Senators Charles E. Schumer (D-NY), Lindsey Graham (R-SC), Sam Brownback (R-KS), Sherrod Brown (D-OH), Olympia Snowe (R-ME), Evan Bayh (D-IN), Ben Cardin (D-MD), Robert Casey (D-PA), Russ Feingold (D-WI), Kirsten Gillibrand (D-NY), Carl Levin (D-MI), Jim Webb (D-VA), Arlen Specter (D-PA), Blanche Lincoln (D-AR), and Susan Collins (R-ME).
“Our workers are losing their jobs because countries like China continue to place artificial discounts of up to 40 percent on their products and then sell them here in Michigan at a cheaper price,” said Stabenow. “This unfair practice puts our manufacturers and businesses at an extreme disadvantage and costs us jobs. That’s why I have joined with my Democratic and Republican colleagues to introduce this bill to require the Departments of Treasury and Commerce to take action and stop these countries from cheating.”
Stabenow has been a long-time proponent for legislation that penalizes countries that misalign their currency. Too often, when consumers buy automobiles, appliances or furniture made in countries like China the price seems like a bargain. However, consumers are actually seeing a cheaper price because foreign governments subsidize their products by keeping their currency undervalued. According to the Peterson Institute for International Economics, China’s currency remains between 25 and 40 percent undervalued against the dollar. That means China can undercut Michigan manufacturers and put them out of business because of unfair competition.
The Currency Exchange Rate Oversight Reform Act:
• Requires the Department of Treasury to act when it finds an undervalued currency.
-Using international guidelines, Treasury will issue a biannual report that states if a country is fundamentally misaligning its currency or is fundamentally misaligning its currency and needs priority action
-Treasury must immediately engage the foreign government to solve the problem. If the problem is not resolved within 90 days, this bill triggers punitive measures such as preventing the federal government from buying goods and services from those countries
-If after a year, the problem still isn’t resolved, then this bill requires that the U.S. Trade Representative bring a case against the foreign government to the World Trade Organization
-Requires the Department of Commerce to act when a U.S. company is hurt because of undervalued currencies.
-Commerce must investigate a company’s claim that foreign-made products are receiving subsidies
-This bill provides Commerce with formulas to impose penalties for dumping or subsidies so manufacturers and businesses do not have to wait for action by Treasury
Source: Senator Debbie Stabenow
related article ~
March 24th ~ Hearing on China’s Exchange Rate Policy
