Upcoming Senate Vote To Pressure Chinese Yuan
October 6, 2011 by Sam Rolley
A Senate bill that would punish China for valuing its currency artificially low in an effort to keep export numbers high passed a key Senate vote on Thursday, Majority Leader Harry Reid (D-Nev.) said he intended to have a vote on passage completed by late Thursday or Friday.
The measure is designed to set up a process of imposing higher tariffs when a country’s currency is misaligned to subsidize exports.
The vote has been met with discord from some multinational business leaders and the White House, who fear that taking actions against the Chinese may lead to a trade war. The Chinese said that the bill violates the World Trade Organization and would seriously disturb U.S.-China trade relations.
According to POLITICO, Senate Minority Leader Mitch McConnell (R-Ky.) said Wednesday that the bill is not likely to be supported in the House, as Speaker John Boehner (R-Ohio) has already urged lawmakers not to move forward with the bill. Despite disagreement, support appears to be growing in favor of the bill.
The Thursday vote to advance the bill was 62-38. On Monday, the Senate voted 79-19 to bring the bill to the floor. Thursday’s narrower margin resulted from a dispute between the two parties over what amendments will be allowed, according to USA Today.
Supporters of the bill note that the U.S. trade deficit with China has grown by about $263 billion over the past 20 years. The massive increase, economist say, occurred because the yuan is undervalued 25 to 40 percent against the dollar, making Chinese goods much cheaper than American products.