U.S. legislation aimed at stopping China from “manipulating” its currency by imposing duties on Chinese products would get overwhelming support in the U.S. Senate, co-author Senator Lindsey Graham said.
“We’d get 80 or 90 votes if we could ever get this sucker to the floor,” the South Carolina Republican lawmaker told a U.S. Senate Banking Subcommittee on Economic Policy hearing.
Graham said he hoped to move the bill, co-authored with 13 other senators, in the 100-member Senate this year.
“I understand why the administration is reluctant to push China, but unfortunately we’re running out of time. This will be the year,” he told reporters outside the hearing.
Many U.S. lawmakers complain that China’s currency is undervalued by as much as 40 percent, giving its companies an unfair price advantage in international trade.
Analysts expect that China is poised to resume policies that would allow its yuan to trade more widely against the currencies of trading partners. But most say this would lead to only a slight appreciation of the Chinese currency.
“I can’t live with small changes in the yuan,” Graham said.
“I’m looking for systematic change,” he said.
Graham and Democratic Senator Charles Schumer co-authored a bill in 2005 that threatened to slap a 27.5-percent across-the-board tariff on Chinese goods because of its currency policies. However, they later withdrew that plan.
Graham said China was “addicted to exports” and that needed to change to cut persistent trade surpluses, while the United States needed to increase its savings and take other steps to reduce chronic deficits.
“We depend a lot on China, but at the end of the day, the relationship between China and the United States is going to suffer if the American citizenry at large believes—particularly our manufacturing community—that our policies are imbalanced,” he said. (Reuters)