Congress is pushing for a showdown with China.
The House Ways and Means Committee will meet Friday to debate a bill that would prompt the government to take more aggressive action in dealing with China’s efforts to hold down the value of its currency, the renminbi.
Some 150 legislators on both sides of the aisle support the legislation, known as the Currency Reform for Fair Trade Act and sponsored by U.S. Reps. Tim Ryan, D-Ohio, and Tim Murphy, R-Pa. A hundred representatives signed a letter this month pushing for the legislation, which would authorize the U.S. to slap duties on Chinese goods, to come to the House floor for a vote.
Supporters contend China robs Americans of high-paying manufacturing jobs by spending tens of billions of dollars every month buying the U.S. currency. By bolstering the value of the dollar against the renminbi, China unfairly holds down the cost of Chinese-made goods that otherwise could be made here.
“This unfair trade practice translates into a significant subsidy, artificially making U.S. products more expensive, and jeopardizing efforts to create and preserve manufacturing jobs in America,” House Speaker Nancy Pelosi, D-Calif., said in a statement.
Fred Bergsten, the director of the Peterson Institute for International Economics, told Congress this month that a 20%-25% rise in the value of the renminbi over coming years could create “half a million U.S. jobs,” mostly with above-average wages.
With Democrats facing an election day pummeling six weeks from now, Treasury Secretary Tim Geithner has stressed the need for China to reform its currency practices and to rebalance its export-leaning economy.
“We share the concern of the Committee and many of your colleagues about China's exchange rate policy,” Geithner told Congress last week.
But China has pushed back against pressure on its currency policies and trade balance, calling criticism “baseless.” And U.S. big business, which sees China as a huge market, is pushing back against the House bill and others like it, calling it “totally counterproductive.”
The crossfire shows the political crisis over joblessness is only gaining steam -- and puts an administration that hasn’t been eager to take a stand in a most uncomfortable position.