In control of the legislative agenda for the first time since President Bush took office six years ago, Democrats are working to build a consensus on Capitol Hill for legislation this year aimed at slowing China’s import growth in the U.S. and easing the impact on the American economy.

Retailers and importers that brought in $27.1 billion worth of apparel and textiles from China last year are nervous about the prospects of punitive legislation that could hurt their revenues and force them to shift production, while textile producers are anxious to put a brake on goods coming in from China, which they maintain have contributed to the industry’s decline.
The Congressional focus on China early in the session has shifted from across-the-board punitive tariffs to reforms of trade remedy laws that would ease the way for U.S. manufacturers to file currency or subsidy complaints against China and seek sanctions against its imports.
The growing number of critics of China’s currency exchange rate, including manufacturers, economists and lawmakers, charge that China’s undervalued yuan lowers the price of goods by 15 to 40 percent on the world market. They claim depressing the value of the yuan acts as an export subsidy, putting U.S. companies at a disadvantage and leading to American job losses and a record trade deficit with China, which hit $232.5 billion last year.

China has raised the value of its currency by about 7 percent since July 2005, when it first began to peg the yuan to a basket of currencies rather than just the dollar.
Cass Johnson, president of the National Council of Textile Organizations, said, “Democrats criticized Republicans for not doing anything on China and now that they are in the majority, their rhetoric will be tested. We’ll see if they live up to their own rhetoric and do something meaningful on China.”
Johnson said NCTO supported a bill introduced by Sens. Jim Bunning (R., Ky.) and Debbie Stabenow (D., Mich.) that would define currency manipulation as an illegal subsidy and pave the way for the domestic industry to file cases against China.

According to manufacturers the undervaluation of the Chinese yuan has a “tremendous impact” on his business.

Source: NCTO bulletin

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