Talk of Trade Wars with China, Tariffs, and Currency Manipulation Move to Forefront; US Trade Imbalance – Whose Fault is It?
by ilene - June 11th, 2010 4:29 pm
Talk of Trade Wars with China, Tariffs, and Currency Manipulation Move to Forefront; US Trade Imbalance – Whose Fault is It?
Courtesy of Mish
Congress is one again shaking its currency-manipulation rattle. What’s different this time is Geithner appears to be listening.
Please consider Geithner signals U.S. patience waning on China currency.
Treasury Secretary Timothy Geithner indicated U.S. patience on China’s currency policy was wearing thin on Thursday as a key lawmaker warned that he would move soon on legislation that would penalize Chinese goods.
Striking his toughest tone on the yuan since delaying a decision in early April on whether to name China a currency manipulator, Geithner told a U.S. Senate hearing Chinese policies had a harmful worldwide impact.
"A stronger renminbi would benefit China because it would boost the purchasing power of households and encourage firms to shift production for domestic demand, rather than for export," he told the Senate Finance Committee.
"The time is long past for any Treasury Department to admit publicly what everyone else already knows, that China is manipulating the value of its currency in order to gain an unfair advantage in international trade," said Charles Grassley, the senior Republican Senator on the committee.
Democratic Senator Charles Schumer told Geithner to "be prepared" because lawmakers would move forward soon with legislation that would slap anti-dumping penalties and countervailing duties on goods from China and other countries with a "fundamentally misaligned" currency.
Senator Graham Threatens Veto-Proof Currency Legislation
Congress is increasingly frustrated with the China’s currency peg, so much so that senators suggest there may be enough votes to override a presidential veto. Bloomberg reports Graham Says China Yuan Measure Has ‘Huge’ Support in Congress.
U.S. Senator Lindsey Graham said legislation aimed at getting China to raise the value of its currency has “huge” support in Congress, and President Barack Obama “runs the risk” of being overridden if he vetoes it.
“The frustrations with China’s trade practices are growing by the moment,” Graham, a South Carolina Republican, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.
He called the measure a “test” of the administration because Obama “campaigned that he would stand up to China currency manipulation.” Graham has joined Senator Charles Schumer, a New York Democrat, in sponsoring legislation targeting China’s yuan.
Lawmakers are pushing for a vote on
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.