US lawmakers set to unveil bill to penalize China over currency
US lawmakers are to unveil a proposed law this week that could address concerns China is keeping its currency allegedly undervalued, Congressional staff said.
Details of a bipartisan bill "to address undervalued currencies that harm US trade and economic interests" would be unveiled on Wednesday, a statement from the powerful Senate committee on finance said Monday.
They would be released by four senior Senators who crafted the bill, and on the same day when the US Treasury makes its semiannual report about currencies to Congress.
The administration of US President George W. Bush is under pressure from lawmakers in the Democratic-controlled Congress to label China a "manipulator" of its yuan currency.
The Senators "will discuss the new US responses their bill requires when other nations, including China, unfairly undervalue their currency," the statement said, without giving a clue on the proposed legislation.
Lawmakers say China grossly undervalues the yuan, making US-bound exports cheaper and fueling a ballooning US-China trade deficit, at 232.5 billion dollars last year.
Despite heavy US dependence on China, some lawmakers want trade sanctions, including a possible 20 percent across-the-board tariff on Chinese goods.
"Fundamentally misaligned currencies distort global markets and put US manufacturers and farmers at a competitive disadvantage," said the statement by the Senate finance panel, which has jurisdiction over US trade policy.
Democratic Senator Charles Schumer, a panel member, said recently that any currency bill against China would be "well-crafted legislation -- WTO-compliant and strong and effective -- (and) is likely to pass with a veto-proof margin."
Schumer had led an unprecedented effort in the last Republican-dominated Congress by introducing a bill to slap punitive tariffs on Chinese imports if it did not revalue its currency.
The bill surprisingly won two-thirds support in the Senate in a procedural vote. But it was held back to give Beijing time to undertake currency reforms.
The new "consensus" bill will protect US interests and comply with World Trade Organization (WTO) rules, the statement Monday said.
Talks led by Chinese Vice Premier Wu Yi and US Treasury Secretary Henry Paulson last month, as well as subsequent discussions between the Chinese leader and US lawmakers, failed to end concerns over the yuan.
But Wu warned that any attempt to impose pressure on the yuan could probably "injure the interests of the two countries and the public."
The United States estimates the dollar is overvalued by as much as 40 percent against the yuan.
China recently widened the trading band on the yuan but US officials wonder whether Beijing would grant greater flexibility to the currency's movement on a daily basis and over time.
AFP
