House and Senate members introduce legislation to combat currency manipulation
Members of Congress in the U.S. House of Representatives and U.S. Senate introduced legislation on February 10 that would enable the U.S. domestic industry to seek countervailing duties against imports from countries that have undervalued their currency.
The House bill, named the Currency Reform for Fair Trade Act, was sponsored by House Committee on Ways and Means Ranking Member Sander M. Levin (D-MI), and co-sponsored by Reps. Tim Murphy (R-PA), Tim Ryan (D-OH), and Mo Brooks (R-AL). Ranking Member Levin has long emphasized a need for the White House to address currency manipulation by countries such as China. In discussing why he introduced the bill, Ranking Member Levin said, “Over the past decade, currency manipulation by foreign governments has resulted in an increase in unfairly traded imports into the United States and has made it more difficult for U.S. exporters to compete in foreign markets.”
The Senate version of the legislation, called the Currency Undervaluation Investigation Act, was sponsored by Jeff Sessions (R-AL) and contains some differences from the House bill. Other co-sponsors of the bill include Senators Richard Burr (R-NC), Robert Casey (D-PA), Joe Donnelly (D-IA), Lindsey Graham (R-SC), Rob Portman (R-OH), Sherrod Brown (D-OH), Charles Schumer (D-NY), and Debbie Stabenow (D-MI). Senator Brown, who has led the Senate Democrats on this bill, stated, “Instead of addressing our growing trade deficit, we’re pursuing trade deals with countries that manipulate their currency.” Senator Sessions commented, “America has always been a trading nation, but a trade relationship is like a contract: both parties must agree and play by the same set of rules.”
Some expressed doubts that Congressional legislation was the right way to tackle currency manipulation. House Ways and Means Committee Chairman Paul Ryan (R-WI) issued a press release regarding the bills, contending that, “With all the damage such an approach would do to the United States and our standing in the world, it provides no real incentive for bad actors to change behavior.”
The current White House Administration has thus far advocated addressing currency manipulation through diplomatic means. “We agree with many in Congress that more needs to be done and are working with them to figure out if there is something that can be accomplished in the context of our trade agreements that is consistent with our overall strategy of bilateral and multilateral engagement,” Treasury Secretary Jacob J. Lew said in a statement to the New York Times. “We remain concerned that an enforceable provision on currency could have a negative impact on our ability to protect American workers and firms and set back our international efforts.”