US House Speaker Opposes China Currency Bill

Posted October 5th, 2011 at 12:25 am (UTC-5)
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U.S. House Speaker John Boehner has expressed his strong opposition to legislation aimed at punishing China for undervaluing its currency.

The leader of the Republican-led House told reporters Tuesday it is “pretty dangerous” to promote a bill forcing a nation to deal with the value of its currency, and beyond the scope of the U.S. Congress. Boehner’s position suggests the bill will not be put to a vote in the House, despite the support of 225 lawmakers — including 61 Republicans.

The speaker’s remarks came a day after the U.S. Senate voted to proceed with debate on the bill, which allows the United States to impose retaliatory tariffs on any country that deliberately keeps the value of its currency artificially low, although it does not specifically mention China. Democratic Senator Charles Schumer criticized Boehner’s stance, saying the only thing Beijing understands is “being tough.”

The measure builds on growing U.S. anger about China’s currency policy. U.S. officials have long complained that China intentionally maintains an undervalued yuan as part of a strategy to benefit domestic exports and put foreign imports at a disadvantage.

Federal Reserve chairman Ben Bernanke told a U.S. congressional committee that Beijing’s currency policy is blocking a more normal recovery for the global economy.

Chinese officials denounced the bill Tuesday, saying the United States is using the currency issue as an excuse for protectionist trade measures. In a posting on the government website, foreign ministry spokesman Ma Zhaoxu said the bill “gravely” violates World Trade Organization rules and would seriously upset trade and economic relations between the two nations.

Critics of the bill in the U.S. warn it could set off a trade war with China.

White House spokesman Jay Carney told reporters Tuesday the Obama administration was reviewing the bill. Carney said the administration shared lawmakers’ concerns about China’s currency, but it also had to take into account Washington’s “international obligations.”

While the White House agrees that China’s yuan is undervalued, it has decided not to formally designate China as a currency manipulator.