Home >> SGMA Opposes China Currency Legislation as Senate Vote Nears

SGMA Opposes China Currency Legislation as Senate Vote Nears

SGMA was among a group of 50 leading business groups that wrote to Senate leaders on September 21 expressing opposition to China currency legislation.  The letter was sent in anticipation of a China currency bill (S. 1619) introduced the next day by a bipartisan group of 20 senators, including Sens. Charles Schumer (D-NY) and Lindsey Graham (R-SC).  Senate Majority Leader Harry Reid (D-NV) has announced his intention to bring the bill to the Senate floor in October.

The Currency Exchange Rate Oversight Reform Act of 2011 combines portions of the China currency bill passed by the House during the last Congress with portions of legislation previously introduced by Sens. Schumer and Graham.  The bill would change the criteria by which the Treasury Department determines whether countries’ currencies are misaligned and require more specific action by the Administration following an affirmative determination by Treasury, including possible ramifications in the handling of antidumping and countervailing duty investigations.  Click here for a summary of the proposed China Currency legislation.
 
Bill proponents are predicting that the measure will pass the Senate easily, perhaps garnering 70 or more votes.  This would put pressure on House Republican leaders, who had not wanted to take up the China currency issue, to address the issue in some fashion as next November’s elections approach.

Aside from the September 21 industry letter, SGMA has been an active and frequent critic of legislation addressing China’s currency and exchange rate policies.  SGMA has argued that the legislation would be counterproductive in that it would not create an incentive for China to modify its exchange rate policies and instead would likely trigger retaliation against U.S. exports to the Chinese market.  Moreover, proposals to make currency undervaluation an actionable subsidy under U.S. countervailing duty (CVD) laws likely would violate WTO rules.  A copy of the SGMA-supported manufacturing industry letter sent to Congress can be found by clicking here.

POSTED - September 27, 2011