WASHINGTON, D.C. — Following new figures that show a 34 percent jump over last month’s U.S.-China trade deficit, U.S. Sens. Sherrod Brown (D-OH), Jeff Sessions (R-AL), Chuck Schumer (D-NY), Lindsey Graham (R-SC), Debbie Stabenow (D-MI), Richard Burr (R-NC), Susan Collins (R-ME), and Robert Casey (D-PA), today introduced the Currency Exchange Rate Oversight Reform Act of 2013, bipartisan legislation that would reform and enhance oversight of currency exchange rates. Specifically, the bill would use U.S. trade law to counter the economic harm to U.S. manufacturers caused by currency manipulation, and provide consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment. The senators’ introduction comes in advance of upcoming talks between President Obama and Chinese President Xi.
“As our trade deficit continues to widen, our need to level the playing field for American manufacturers and workers becomes more urgent,” Brown said. “Yet instead of taking action, we’re pursuing trade deals with countries that manipulate currencies. American workers and manufacturers are the most competitive in the world. But when countries like China cheat by manipulating currency, that’s not competing – it’s cheating. Our bipartisan bill would create jobs by leveling the playing field for American manufacturers – at no cost to taxpayers.”
“American manufacturers and American workers are suffering from currency manipulation that unfairly impacts their ability to compete,” Sessions said. “It is past time to confront the problem. That is why I, along with a bipartisan group of senators, have re-introduced the Currency Exchange Rate Oversight Reform Act. This bill, which passed the Senate in 2011 by a vote of 63-35, would help end abusive currency manipulation by China and other countries. When another country undervalues its currency its manufacturers and exporters gain a significant trade advantage. Over time this manipulation has done serious damage to our economy. It will be important for President Obama to raise this issue when he meets with China’s President Xi Jinping this week in California. It is critical for American workers.”
“The single biggest step we could take today to create jobs in American manufacturing is to tackle China’s currency manipulation,” Schumer said. “There is absolutely no reason that China should get to play by a different set of rules than hardworking Americans. That’s why we’re making a renewed, bipartisan push to get this bill passed and on the President’s desk, and send a strong message to the Chinese government that the rigged game must come to an end.”
“It is universally accepted that China and other major countries intentionally manipulate their currency to create an advantage for themselves in the marketplace” Graham said. “Manufacturing jobs in South Carolina and across the country are being destroyed because the Chinese and others continue to defy the rules of international trade.”
“Currency manipulation translates to lost American jobs and economic hardship for families, especially in states like Michigan,” Stabenow said. “Effectively addressing this problem would create millions of American jobs and it wouldn’t cost a dime. Many of us have been fighting to stop illegal action on currency by countries like Japan and China for years, and it is time to ensure that our businesses and workers are no longer put at a competitive disadvantage.”
“For years, China has skewed the value of its currency in order to give itself an unfair advantage in the global economy,” Burr said. “This practice by China – which has artificially made American exports more expensive -- has exacerbated our trade deficit with China and hurt our economy. I am pleased to cosponsor this legislation which sends China a message that currency manipulation won’t be tolerated.”
“Chinese currency manipulation is a critical issue for numerous industries, including paper producers in Maine,” Collins said. “The Chinese yuan is pegged to the U.S. dollar at artificially low levels. As a result, China is able to undervalue the prices of its exports. Not only does this practice provide Chinese producers with a price advantage, but it is a clear subsidy.”
“Pennsylvania has seen too many jobs shipped overseas because of unfair trade practices,” Casey said. “China’s currency manipulation amounts to cheating and it has put our workers and our economy at a disadvantage. The U.S. has allowed this practice to continue too long without consequence and it is time to level the playing field. ”
A December 2012 report by the Peterson Institute for International Economics concluded that currency manipulation by foreign governments had cost the U.S. from 1 million to 5 million jobs and increased the U.S. trade deficit by $200 billion to $500 billion per year.
The Economic Policy Institute (EPI) estimates that ending currency manipulation in the United States would increase U.S. net goods exports by between $184.1 billion and $387.5 billion; increase U.S. gross domestic product (GDP) by between $225.02 billion and $473.68 billion; and increase total American salaries by between $112.99 billion and $237.84 billion. EPI also found that addressing currency manipulation could support the creation of 2.25 million American jobs.
A complete summary of the Currency Exchange and Oversight Reform Act of 2013 can be read HERE.