Legislation that will push the yuan value raise in China will be passed by a bipartisan group of senators. New York democrat, Senator Charles Schumer who, in the last 6 years, has proposed same legislation said this would have a broad bipartisan support and may pass in the Senate this 2011.
Schumer told reporters that the bill will send Chinese President Hu Jintao, a clear message. Hu is due to arrive today to meet with Obama.
The lawmakers protest China’s foreign exchange market intervention, putting artificial weakness on the yuan that benefits China’s exporters at the expense of American competitors. Schumer estimates as much as 40% yuan undervalue.
Senate returns next week from a break and the legislation will be introduced officially. It will permit domestic producers to seek imports duties from countries proven to have a ‘fundamentally misaligned’ currency.
The U.S. government will cease federal contacts for the nation; World Bank lending will be obstructed and will seek consultations from the auspices of the International Monetary Fund.
Complaint may be filed by the administration at the World Trade Organization should China keep on the practice for another year.
A similar legislation was passed by the House of Representatives in 2010 but never made it to the Senate. Robert Casey, a Pennsylvania Democrat and bill supported said the dynamic of last November’s election may make it a priority this year. He told reporters that China’s currency argument made in the 2010 elections was popular and that there is a bipartisan dynamic to this now, which is rare for an economic issue.