US Senators Introduce Currency Bill To Protect Against China
Yesterday, Steel Market Update wrote a blog regarding China’s currency manipulation which has been affecting the trade deficit with the United States. The trade deficit was $278 billion during 2010 and has displaced nearly 2.8 million U.S. jobs since 2001 according to the Economic Policy Institute report. On Thursday a group of 20 U.S. senators introduced The Currency Exchange Rate Oversight Reform Act of 2011. The bipartisan group of senators expects the legislation to pass next month.
In a Detroit News article seen by SMU they reported, “Many senators have complained for years that China manipulates its currency by intervening with its large foreign reserves to keep the value of its currency artificially low. That makes Chinese exporters cheaper in dollar terms.” To read more on this and how it is affecting manufacturers, please review our SMU’s blog posted on Thursday, September 22nd.
Michigan's Senator Debbie Stabenow, said "We have momentum to be able to get this bill passed," Stabenow said. "We want to export our products — not our jobs." Stabenow also cited Michigan auto suppliers as being unfairly hurt by China’s currency issues, making it hard for competitive-priced auto parts. This leads more companies like auto suppliers to move their manufacturing overseas to lower costs. “The bill would require the Commerce Department to evaluate currency manipulation as an unfair subsidy. U.S. firms and workers hurt by the practices could ask for countervailing duties to be slapped on Chinese products. The senators say the provision would comply with U.S. obligations under the World Trade Organization,” according to the Detroit News article.
The steel industry, including the AISI, is in full support of the bill as the steel sector believes it too has lost jobs from China’s currency manipulation. SMU will watch the progress of this bill carefully as it moves through the U.S. House of Representatives.
Source: The Detroit News