China's decision to send President Hu Jintao to Washington for a nuclear security summit this month should not stop the United States from pressing Beijing to revalue its currency, Democratic Senator Charles Schumer said on Thursday.That's all very well and good, Chucky, but we've heard so many pledges from you about "doing something" about China that much warranted doubt has set in. At any rate, Schumer has just issued a fairly belligerent press release--during a visit to a NY-based manufacturer, naturally--to signal that he is not backing down this time around or something to that effect. Here it is in full; I particularly like the use of bold and all caps as if I were reading a tabloid...
"The most important issue in our bilateral relationship with the Chinese is their currency manipulation and its effect on U.S. jobs. No amount of cooperation from China on other issues should divert the U.S. from pursuing fair treatment on currency," said Schumer, co-author of a Senate bill that would penalize China if it does not change its currency policy [my emphasis].
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FOR IMMEDIATE RELEASE: March 31, 2010
SCHUMER: NEW YORK'S CAPITAL REGION MANUFACTURING HAS BEEN DEVASTATED BY UNFAIR CHINA CURRENCY MANIPULATION; SCHUMER TO LEAD BIPARTISAN LEGISLATION TO LEVEL THE PLAYING FIELD, PUT THOUSANDS BACK TO WORK
China's Currency Manipulation Undermines U.S. Manufacturing Base By Making U.S.-Made Goods More Expensive Relative To Foreign Goods
Capital Region Manufacturing Sector Has Shrunk By Nearly 30% In Last Decade And Has Lost 2,000 Manufacturing Jobs In The Last Year Alone - In Good Part Because Of Artificially Cheap Chinese Imports
Schumer Stands With Representatives of Company Facing Ever Growing Pressure From Artificially Cheap Chinese Imports
Today, U.S. Senator Charles E. Schumer announced that he is pushing new legislation to vigorously address China’s currency manipulation that unfairly and negatively impacts U.S. trade. If passed, the legislation would provide less flexibility to the Treasury Department when it comes to citing countries for currency manipulation. It would also impose stiff new penalties on countries that manipulate their currency, including possible tariffs on the countries’ exports and a ban on any companies from those countries receiving U.S. government contracts. Schumer discussed his legislation in the Capital Region today at Simmons Machine Tool Corporation, a Menands New York based company that could see its sales and supply chains undercut by Chinese imports that are made cheaper by currency manipulation, especially as China bids more frequently on rail projects.
“We are sending a message to the Chinese government: if you refuse to play by the same rules as everyone else, we will force you to,” Schumer said. “China’s currency manipulation would be unacceptable even in good economic times. At a time of 10 percent unemployment, we simply will not stand for it. There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China’s currency manipulation. This is not about China bashing; it’s about defending the people of New York and of the United States.”
By manipulating currency exchange rates, countries can gain an unfair advantage over U.S. manufacturers by effectively lowering the price of their exports. This hurts U.S. manufacturers forced to compete at home with artificially cheap imports. Currency manipulation also imposes a direct cost on U.S. exports, making American goods sold in China more expensive and making it more difficult for U.S. exporters to compete with artificially cheap Chinese goods around the globe. This creates an unfair trade advantage, which ultimately harms New York’s manufacturers, workers, and farmers, and contributes significantly to the U.S. trade imbalance.
Currency manipulation and the continuing trade imbalance with China has severely impacted the U.S. manufacturing sector in relation to both domestic sales and exports. The U.S. has lost over 5.3 million manufacturing jobs in the last decade. And in the last ten years, New York State has lost over 300,000 manufacturing jobs. Specifically, during the last decade in the Capital Region the manufacturing sector has declined by 28%, shedding approximately 10,000 jobs. Since the beginning of the recession, millions of Americans have lost their jobs and unemployment has been hovering around 10 percent for several months.
Schumer has long worked to pressure China to allow its currency to float. In a previous Congress, Schumer authored and passed China trade legislation, but the bill died in the House of Representatives. The legislation Schumer is discussing today, however, has 16 bipartisan cosponsors and combines several separate bills into a single, strong bill that can pass the Senate and the House.
Specifically, Schumer’s bipartisan legislation, the Currency Exchange Rate Oversight Reform Act of 2010 would:
- Create a new approach to identifying currency manipulators by requiring that the Treasury Department base its determination strictly on objective measures related to currency exchange rates. Under current law, Treasury also has to determine that the misalignment is a willful attempt to gain a trade advantage before it can cite the country. The new legislation would eliminate the need to show intent.
- Establish important consequences immediately upon designation, moderately severe consequences if talks with the offending country have not resulted in appropriate policies and identifiable actions to eliminate misalignment after 90 days, and more severe consequences if consultations have not resulted in appropriate policies and identifiable actions to eliminate misalignment after 360 days.
- Establish two tracks by which the Department of Commerce can take action should a foreign country refuse to adjust its currency. One path would be to utilize anti-dumping laws to enable Commerce to counter the effect that a manipulated currency has on pricing. The other path would allow Commerce to apply countervailing duties, intended to offset foreign government subsidies, to goods coming into the United States from nations that misalign their currency.
Schumer added, “The number one issue for the people of New York is jobs and bringing back our economy. Getting the Chinese government to play by the rules of our economic system would be a huge step forward towards securing our economy and the manufacturing jobs of New Yorkers. It’s vital that we get this done.”