Coalition Encourages Congress to Address Undervaluation of China's Currency

The Trade Enforcement Act of 2008 (H.R. 6530) needs to be strengthened by the addition of language that would treat injurious currency depreciation by China or any other U.S. trading partner as a countervailable subsidy and actionable dumping, according to an alliance of industry, agriculture, services, and worker organizations.

The China Currency Coalition (CCC) says it believes that the continuing undervaluation of China's currency, the renminbi, and of other countries' currencies is a major, overriding trade issue that urgently requires immediate, remedial steps to be taken. The coalition views China's currency policies as a major illegal subsidy in international trade.

"China's manipulation of its currency since 1994 has taken an enormous and increasingly damaging toll on U.S. working families and manufacturing," says Richard Trumka, co-chair of the coalition and secretary-treasurer of the AFL-CIO labor organization. "It undermines the U.S. economy and our national security. The U.S. government stands by as China persists year
after year with this policy. The situation simply becomes worse as we trade jobs and dollars for airplane parts and debt, and the nation continues to lose more and more of its critical manufacturing base. American workers and their families expect better of our government. The time for action is long overdue. We demand an end to the Chinese government's enforced
undervaluation of the renminbi."

Adds Doug Bartlett, co-chair of the coalition, owner of Bartlett Manufacturing Company, Inc., in Cary, Ill., and chairman of the U.S. Business and Industry Council, "Tolerance of China's unfair trade practices by the U.S. government is creating an impossible situation for domestic
U.S. manufacturers. No matter how efficient and innovative we are and no matter how hard we work, we cannot overcome the enormous subsidy provided by currency manipulation. Inaction by the Congress and the Executive Branch also creates a strong incentive for other countries to follow China's lead in competitively undervaluing their currencies, in self-defense if nothing
else.

"The result is a series of severe global economic imbalances that are unsustainable and dangerous for the United States and for the world economy," Bartlett adds. "China's trade surplus with the United States is now approximately a quarter of a trillion dollars annually, and China's foreign reserves -- even after its many sizable, ongoing investments abroad to secure raw materials and technology -- are estimated by the CCC to be in the range of at least $1.8 - $2 trillion and growing rapidly. These alarming numbers make clear that China's leaders are simply unwilling to allow self-correcting market forces to value the renminbi, which the CCC has
calculated to be 30 percent or more relative to the U.S. dollar. If the U.S. government really believes in free trade, then it must make sure that there is free trade in currencies."

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