The House overwhelmingly passed legislation Wednesday designed to improve the U.S. trade imbalance with China by allowing tariffs on imports that are bolstered by currency manipulation. The vote was 348 -79.
The bill would allow the Commerce Department to impose countervailing duties on Chinese goods on a case-by-case basis when it determines that the undervalued yuan serves as an export subsidy.
Beijing announced in June that it would allow the yuan to appreciate, but since then its value has grown just 2.2 percent. At that time, the Peterson Institute for International Economics estimated the currency was undervalued by about 24 percent.
“There has to be a strategy,” said House Ways and Means Chairman Sander Levin. “China has a strategy and it’s important that the U.S. has a strategy too. This is just one of the important pieces.”
The bill passed with 99 of the 178 Republicans voting for it after an amendment ensured that it met World Trade Organization requirements.
Still, some Republicans argued that the legislation could encourage Chinese retaliation and would cause the cost of popular Chinese goods to rise.
“They are subsidizing goods to the American people at a time when many family budgets are being strained,” said Rep. Jeb Hensarling, R-Texas. He said the bill would cause the U.S. government to choose between consumers and manufacturers — and would ultimately punish consumers.
Concerns about the effectiveness of the legislation were also reflected in a letter sent to Congress Tuesday by a coalition of business organizations, including the U.S.-China Business Council and the U.S. Chamber of Commerce. The groups called the bill counterproductive to overall trade goals with China.
However, bill supporters depicted the move as an effort to bring manufacturing jobs back to the United States. Many also said the bill was necessary to counter inaction by the Obama administration, which has been silent on the legislation.
“I hope they are grateful to us,” said Rep. Tim Murphy, R-Pa., one of the bill’s sponsors, calling the measure a tool for negotiation.
“It will give the president leverage in his conversations with the Chinese people about how seriously the American people are watching this legislation,” said House Speaker Pelosi. “We make it clear that if China wants a strong trading relationship with the United States, they must play by the rules.”
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