Senate hits China for 'cheating' to steal US jobs
The Senate voted Monday to advance a bill that would punish China for manipulating its currency to drive exports. If it became law, the bill would risk a trade war over US jobs.
J. Scott Applewhite/AP
In a rare bipartisan vote, the Senate on Monday voted 79 to 19 to take up a bill that would punish China for manipulating its currency, risking a potential trade war with the economic giant.
Though prospects for the bill in the House are seen as uncertain, jobs lost due to competition with China is a blistering issue for voters, especially in the nationâ€™s industrial heartland.
The bill would impose tariffs on Chinese goods in response to Chinaâ€™s policy of keeping its currency, the yuan, artificially low. The low value of the yuan keeps the price of Chinese goods low, giving them an advantage over American-made goods.
Since China joined the World Trade Organization in 2001, the US has lost 2.8 million jobs as a result of increased trade with China, according to the Economic Policy Institute. The cumulative US trade deficit with China over the same period amounts to more than $1.76 trillion, according to the 2010 report of the US-China Economic and Security Review Commission. The commission has highlighted the impact of currency manipulation in each of its annual reports to Congress.
â€śJobs and wealth are leaving the US and going to China, because China cheats,â€ť said Sen. Charles Schumer (D) of New York, in comments to reporters after the Oct. 3 vote. With its currency edge alone, â€śChina grabs for itself a 30 percent advantage.â€ť
But critics, including business groups that benefit from trade with China, say that the Senate bill could set off Chinese retaliation that could damage US exports in a critical market.
China trade is one of those rare big economic issues that does not break on party lines. Thirty-one Republicans joined all but three Democrats on a procedural vote in support of the bill. Sixteen Republicans, including those elected with strong tea party support, and Democratic Sens. Maria Cantwell and Patty Murray of Washington, a state with strong trade ties with China, opposed the measure.
Voting against China is â€śgreat politics, but terrible policy,â€ť said Sen. Bob Corker (R) of Tennessee after the vote. â€śWeâ€™re in a recession with a financial crisis in Europe. Do we really want to add to that a trade war with the [next] largest economy in the world?â€ť
In 2010, the Democrat-controlled House passed a similar measure, but the new GOP House majority is in no rush to take up the issue again. House majority leader Eric Cantor told reporters on Monday that he is â€ścurious as to where the [Obama] administration is on this.â€ť
â€śIf there are unfair practices going on, we should look to our trade representative and the administration to address those,â€ť he added.