Congress to vote on punitive tariffs for Chinese imports amid frustration over ‘beggar-thy-neighbour’ currency policy
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| Nicky Loh/Reuters |
Andrew Clark
Guardian
American frustration with Beijing’s trade policy boiled over today into a congressional vote that was expected to back a threat of punitive tariffs on Chinese imports to compensate for perceived manipulation of the level of the yuan.
Exporters and politicians in the US have become increasingly frustrated with the Chinese government’s interventionist tendency to keep its currency artificially weak – a practice that means exports of Chinese goods are cheap around the world, while imports of foreign goods are expensive to Chinese consumers.
In a rare display of cross-party consensus, the US House of Representatives scheduled a swift vote on a bill to authorise the US commerce department to impose duties on Chinese imports to cancel out what some politicians claim is a 40% discount on their price on global markets. America’s trade deficit with China is expected to hit $250bn (£158bn) this year.
“It’s time to deliver a strong message to Beijing on behalf of American manufacturing: Congress will do whatever it takes to protect American jobs,” said Tim Murphy, a Democratic congressman sponsoring the bill. He said the weakness of China’s currency had cost 500,000 US jobs.
Economists believe that an uneven playing field in trade between the world’s two largest economies is slowing America’s recovery from recession. Barack Obama this month dispatched his financial guru Larry Summers to Beijing in an effort to secure greater flexibility in the yuan, and the US president raised the issue personally with China’s premier, Wen Jiabao, at last week’s UN general assembly.
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