U.S. House moves against China's undervalued currency

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WASHINGTON -- An attempt to provoke China and protect American manufacturing jobs handily passed the U.S. House on Wednesday, as the body approved a bill to strike against China's perceived undervalued currency.

The bipartisan measure sponsored by Reps. Tim Murphy, R-Upper St. Clair, and Tim Ryan, D-Ohio, passed 348-79. It would authorize the Commerce Department to impose tariffs and countervailing duties against goods from countries with currencies that it deems are undervalued -- a clear strike at the apparent too-low value of the renmibi.

"We want to make it very clear that Congress cannot stand by and wait while 15 million Americans are wondering where the work is," Mr. Murphy said.

China ties the value of its currency, also known as the yuan, to the dollar rather than allowing it to float. The Obama administration has pressured China to allow the currency's value to rise, and it has gained about 2 percent on the dollar in the past three months -- but that's a fraction of what U.S. officials would like.

Still, the fate of the currency bill is unclear. The Senate likely will take it up during a post-election lame-duck session, but similar measures have failed there in the past, and the Obama administration has not taken a position on the bill.

On Wednesday, a man in Des Moines, Iowa, asked President Barack Obama about the issue, and the president didn't specifically mention the House bill. "People generally think that they are managing their currency in ways that make our goods more expensive to sell and their goods cheaper to sell here ... it's a contributing factor to our trade imbalance," Mr. Obama said, according to a transcript of his remarks.

Many business groups opposed the bill, fearing retribution from the Chinese against American exports.

During debate on the House floor, Rep. Jeb Hensarling, R-Texas, said the bill would shift the burden of the undervalued renmibi from manufacturers to consumers.

"They are subsidizing goods to the American people at a time when many family budgets are being strained," he said.

But the bill's backers -- including Democrats aching to show they're helping create jobs with an election on the way -- said the need to protect American manufacturing from a flood of cheap products from China is too great.

"My hope is this can really move us into a new dialogue about trade and about globalization and we can't just drink the free trade Kool-Aid and hope that everything works out OK," Mr. Ryan said.

The vote united the 19-member Pennsylvania delegation, including Rep. Joe Sestak, D-Delaware County, who is running for Senate against Republican Pat Toomey.

In a news release, Mr. Sestak said, "It's time that we put Pennsylvania's working families ahead of Wall Street and China. It's time to say 'Made in America' again."

Also Wednesday, another manufacturing-driven bill, written by Rep. Kathy Dahlkemper, D-Erie, passed, 325-98.

The bill would fund domestic research and development in "rare earths" -- elements with a variety of technological applications that are now developed almost exclusively in China.

Daniel Malloy: dmalloy@post-gazette.com or 1-202-445-9980. Follow him on Twitter at PG_in_DC.


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