Saturday, May 18, 2013
Sen. Olympia Snowe is applauding the Senate’s move Monday evening to clear the way for a final vote – and expected passage – later this week on a bill taking aim at China’s allegedly undervalued currency.
Snowe, R-Maine, has been among those in the Senate pushing for such a move, and co-authored a key provision in the legislation, along with Democratic Sen. Sherrod Brown of Ohio.
Their provision requires the commerce department to treat currency undervaluation as a “prohibited export subsidy,” according to Snowe’s office, which says that would allow the federal government to impose tariffs on subsidized exports from countries that violate the rules.
Snowe and other proponents of the legislation levying tariffs on countries that intentionally undervalue their currencies, says that the Chinese manipulate the yuan’s value to keep it artificially low and thus maintain low prices on Chinese exports. That, in turn, makes it difficult for U.S. manufacturers and other businesses to compete with Chinese goods, Snowe says. Sen. Susan Collins, R-Maine, also is a proponent.
The legislation doesn’t mention China by name, but it clearly aimed at that nation, a huge and still growing global economic behemoth.
Snowe spoke on the floor Monday evening in support of the bill, prior to the 79-19 passage of a procedural motion that easily surpassed the 60 vote threshold needed to proceed to a final debate and vote.
Snowe calls the legislation “a long time in the making – far too long if you ask those of us who have been calling on our government – under the leadership of both Democrats and Republicans – to hold our foreign competitors accountable when they violate our trade rules.”
Snowe says that undervalued Chinese goods have helped create a trade deficit with China and has resulted in lost U.S. jobs. She cites a report by the Alliance of American Manufacturing last week that estimates the U.S. trade deficit with China has cost Maine 9,545 jobs since 2001.
But opponents of the bill believe it will set off a trade war and do more harm than good. Some critics of the measure also question whether tariffs on Chinese goods would really create the kind of jobs proponents claim and say it would result in U.S. consumers paying higher prices on Chinese goods.
The bill, in fact, may be more of a symbolic gesture.
A similar measure overwhelmingly passed the House in 2010, when Democrats were in the majority. But the two top House Republicans, House Speaker John Boehner of Ohio and House Majority Leader Eric Cantor of Virginia, were opposed then and aren’t likely now to bring the bill to the floor. Rep. Mike Michaud, D-2nd, a proponent in the House, notes that the current House China currency bill has 218 co-sponsors, a majority. It is possible House proponents may make a move to gather signatures of a majority of House members, 218 or more, for a procedural "discharge petition" that forces a bill to the floor, but it could be tough to persuade many Republicans to rebel against House leaders that way even if they support the bill.
In any case, even if the bill were to pass the House as well, the Obama administration also is leery of punishing China for its currency manipulation. While President Obama has indicated he believes China needs to allow its currency to rise to a fair level, he and his economic advisors also are wary of setting of a trade war with U.S. tariffs.
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Kevin Miller is Washington bureau chief for the Portland Press Herald and MaineToday Media. He has worked as a journalist in Maine for 6 ½ years, covering the environment, politics and the State House. Before arriving in Maine, he wrote about politics, government and education for newspapers in Virginia and Maryland.
Kevin can be reached at 317-6256 or kmiller@mainetoday.com
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