Politics
9:01 pm
Wed October 5, 2011

Bipartisan Support For China Tariffs Ahead Of Vote

Originally published on Thu October 6, 2011 5:48 am

The debate on trade sanctions against China that has roiled the Senate all week comes to a head in a make-or-break vote Thursday. Earlier this week, 79 senators voted to take up the bill, which could slap punitive tariffs on imports from China, the largest U.S. trading partner.

The legislation has strong backing from Democrats and Republicans alike; they say it could boost American jobs by punishing China's efforts to keep its currency undervalued and its exports underpriced. Opponents warn that should the bill become law, it could touch off a devastating trade war.

Senate Majority Leader Harry Reid, D-Nev., predicted Wednesday that the measure's passage could help sustain more than 1.5 million American jobs by making U.S. goods more competitive with Chinese goods that would end up costing more.

"The bill before the Senate would even the odds for American workers and manufacturers in the global marketplace by stopping unfair currency manipulation by the Chinese government," Reid said.

Trade expert Fred Bergsten, who directs the nonpartisan Peterson Institute for International Economics in Washington, D.C., said there's no doubt "China cheats on its most fundamental international obligations." He said China spends $1 billion to $2 billion a day to keep its currency undervalued by 20 to 30 percent.

"That's the equivalent of a subsidy on all exports of 20 to 30 percent, an additional tariff on all imports of 20 to 30 percent — and this is by the largest trading country in the world," he said.

Democrats brought up the populist-flavored legislation prior to planned votes on three controversial and long-pending trade deals with South Korea, Panama and Colombia. That's fine with South Carolina Republican Sen. Lindsey Graham, a co-sponsor.

"Regardless of the motives, it's an opportunity to pass the bill, and some people would say it gives political cover because the trade agreements are coming — it's a nod to the unions," Graham said, "and what I say is, it is a policy change that is long overdue, that Republicans and Democrats see this the same."

One of those Republicans is Ohio Sen. Rob Portman, who pushed for a re-evaluation of China's currency when he served as U.S. trade representative during the Bush administration.

"I believe this administration should label China a currency manipulator, because I think it's clear that there continues to be manipulation," Portman said.

The Obama White House has pointedly avoided endorsing the China currency bill. White House spokesman Jay Carney on Wednesday expressed concerns that the bill could cause what he called "consistency issues" with the nation's international commitments.

"We have, from the beginning as an administration, worked on the issue of the undervalued Chinese currency, and it has appreciated to some degree as a result, we think, of those efforts," he said. "More needs to be done."

Just as it has divided Democrats, the China legislation has split Republicans. Tennessee's Lamar Alexander, the Senate's No. 3 Republican, called the bill a "punch" in China's nose.

"History teaches us they'll punch us right back in the nose, and the result will be a trade war, which destroys jobs rather than creates jobs," he said.

Another of the bill's co-sponsors says such warnings are overblown. New York Democratic Sen. Charles Schumer said China depends far more on the U.S. as an export market than the U.S. does on China for its own exports.

"So while China will retaliate in a measured way, they're not going to create a trade war," he said. "It's not in their interests; they can't afford to."

A key vote Thursday could come from Senate Republican Leader Mitch McConnell, who says he has not yet made up his mind.

"I'm still looking at it," he said. "I want to see what it looks like at the end."

Even if the bill does pass in the Senate, it could face a tougher climb in the House. Speaker John Boehner, R-Ohio, signaled as much earlier this week.

"I think it's pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency," he said. "This is well beyond, I think, what the Congress ought to be doing."

House members who think otherwise are circulating a petition to force a vote on the bill in the House as well. They say they have the numbers there to pass it.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

LYNN NEARY, HOST:

We move, now, to the U.S. Senate, where there is a make or break vote today. It's on a bill that could slap punitive tariffs on imports from China, one of this country's largest trading partners. The legislation has strong backing from both Democrats and Republicans in the Senate. They say it could boost American jobs by punishing China's efforts to keep its currency undervalued and its exports under priced. But opponents warn that should the bill become law, it could trigger a devastating trade war.

NPR's David Welna has this report.

DAVID WELNA, BYLINE: The debate on trade sanctions for China that's roiled the Senate all week comes to a head today. Earlier this week, 79 senators voted to take up the bill. Majority leader Harry Reid, yesterday, predicted its passage could help sustain more than a million and a half American jobs by making U.S. goods more competitive with Chinese goods that would end up costing more.

SENATOR HARRY REID: The bill before the Senate would even the odds for American workers and manufacturers in the global marketplace by stopping unfair currency manipulation by the Chinese government.

FRED BERGSTEN: There's no doubt, China cheats on its most fundamental international obligations.

WELNA: That's trade expert Fred Bergsten. He directs the non-partisan Peterson Institute for International Economics here in Washington. Bergsten says China spends one to two billion dollars a day to keep its currency undervalued by 20 to 30 percent.

BERGSTEN: That's the equivalent of a subsidy on all exports of 20 to 30 percent; an additional tariff on all imports of 20 to 30 percent, and this is by the largest trading country in the world.

WELNA: Democrats brought up this populist-flavored legislation prior to planned votes on three controversial and long-pending trade deals with South Korea, Panama, and Colombia. That's fine with South Carolina Republican Senator Lindsey Graham, a co-sponsor.

SENATOR LINDSEY GRAHAM: Regardless of the motives, it's an opportunity to pass the bill, and some people would say it gives political cover, because the trade agreements are coming, it's a nod to the unions. And what I say is that it's with policy changes that are long overdue, that Republicans and Democrats see this the same.

WELNA: One of those Republicans is Ohio Senator Rob Portman; he pushed for a revaluation of China's currency as U.S. trade representative during the last Bush administration.

SENATOR ROB PORTMAN: I believe this administration should label China a currency manipulator, because I think it's clear that there continues to be manipulation.

WELNA: But the Obama White House has pointedly avoided endorsing the China currency bill. White House spokesman Jay Carney, yesterday, expressed concerns the bill could cause what he called consistency issues with the nation's international commitments.

JAY CARNEY: We have, from the beginning, as an administration, worked on the issue of the undervalued Chinese currency. And it has appreciated to some degree, as a result, we think, of those efforts. More needs to be done.

WELNA: Just as it's divided Democrats, the China legislation has also split Republicans. Lamar Alexander, the Senate's number three Republican, calls the bill a punch in China's nose.

SENATOR LAMAR ALEXANDER: History teaches us they'll punch us right back in the nose and the result will be a trade war which destroys jobs rather than creates jobs.

WELNA: But another of the bill's co-sponsors says such warnings are overblown. New York Democratic Senator Charles Schumer says China depends far more on the U.S. as an export market than the U.S. does on China for its own exports.

SENATOR CHARLES SCHUMER: So while China will retaliate in a measured way, they're not going to create a trade war. It's not in their interests, they can't afford to.

WELNA: A key vote today could come from Senate Republican leader Mitch McConnell, he says he has not yet made up his mind.

SENATOR MITCH MCCONNELL REPUBLICAN, KENTUCKY: I'm still looking at it. I want to see what it looks like at the end.

WELNA: Even if the bill does pass in the Senate, it could face a tougher climb in the House. Speaker John Boehner signaled as much earlier this week

REPRESENTATIVE JOHN BOEHNER: I think it's pretty dangerous to be moving legislation through the United States Congress, forcing someone to deal with the value of their currency. This is well beyond, I think, what the congress ought to be doing.

WELNA: House members who think otherwise are circulating a petition to force a vote on the bill in the lower chamber as well. They claim they have the numbers there to pass it.

David Welna, NPR news, the Capitol.

(SOUNDBITE OF MUSIC)

NEARY: This is MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.