WASHINGTON — More than 22,500 jobs disappeared from the westernmost counties of New York State — and 2.8 million disappeared nationwide — in the past decade because of the nation’s trade imbalance with China.
And the U. S. Senate on Monday voted to try to do something about it.
A measure cracking down on China for manipulating the value of its currency passed a key procedural hurdle by a 79-19 vote, thereby virtually guaranteeing final Senate passage later this week.
While the bill’s final prospects remain uncertain, advocates of the measure said momentum for the measure is growing in the House, which may consider the bill later this year.
The bill’s sudden movement comes after six years of effort on the part of its sponsors, Sen. Charles E. Schumer, DN.Y., and Sen. Lindsey Graham, R-S. C.
“I think that people are just fed up with the Chinese,” Schumer said in an interview. “China violates rule after rule at will, with currency being the most important.”
The measure makes it much easier for the U. S. Treasury Department to slap tariffs on goods sent to the United States from countries that manipulate the value of their currency. Critics say
China has been doing that for years, thereby reducing the cost of Chinesemade products in the United States while putting American manufacturers at a disadvantage.
Under current law, the department can apply tariffs only if it declares that China or any other nation is deliberately manipulating its currency.
But under the legislation moving forward in the Senate, the Treasury Department would have to determine only that a currency is “misaligned” before giving that country’s government 90 days to make changes before duties are imposed.
In addition, the bill makes it easier for U. S. industries to appeal to the Commerce Department for help in cases where currency manipulation acts, in effect, as an export subsidy.
That’s an especially key issue in parts of the nation — such as Western New York—where manufacturing has long played an oversized role in the economy.
Some 22,551 jobs have been lost in the past decade in the four western-most congressional districts of New York State because of the nation’s trade deficit with China, the Economic Policy Institute, a left-leaning research group, said.
That trade shortfall has cost the state 161,414 jobs since 2001, said the study, which was based on an analysis of International Trade Commission and Census Bureau data.
Business groups such as the U. S. Chamber of Commerce and their backers in the Senate acknowledge that China manipulates the value of its currency, but they insist that legislation aimed at pressuring China could backfire.
“I believe it will result in a trade war” that will hurt both sides, said Sen. Bob Corker, R-Tenn., on the Senate floor.
Noting that American exports to China have been growing rapidly, Corker added: “We’re actually playing with fire here.”
The Senate voted to proceed to debate on the measure, thereby precluding the possibility of a filibuster and clearing way for a final vote.
The measure then will move on to the House, where Majority Leader Eric Cantor, R-Va., has declined to say how he feels about it — as has the Obama administration.
Many House Republicans have long opposed the measure, but there are some signs that could be changing.
Asked about Schumer’s legislation Monday, Rep. Tom Reed, R-Corning, said: “There’s just strong indications that there are some very serious trade issues that need to be very vigorously pursued, and I’m all for pursuing those, so that we send a message to China that we will engage in fair trade, but any type of trade that’s not fair . . . we are not just going to turn a blind eye to it.”
Moreover, supporters of Schumer’s China currency bill hope that House members will vote for it as a counterweight to their support for free trade agreements with South Korea, Panama and Colombia, which are likely to be up for votes in the coming weeks.
The growing momentum for a congressional crackdown on China comes after years of debate on the issue.
“Both the Bush administration and the Obama administration have said: ‘Give us a little time, and we think we can get them to move,’ and they’re just not moving,” Schumer said.
American economists routinely insist that the Chinese currency, the renminbi, is undervalued by as much as 40 percent — thereby giving Chinese manufacturers a huge price advantage over their American competitors.
If the renminbi’s value increased 20 percent, as many as a half million American jobs could result, the Peterson Institute for International Economics said.
But Xinhua, the official Chinese news agency, said last week that the Chinese government is moving in the right direction on the issue.
Xinhua noted that the renminbi’s value has already increased 20 percent since 2005, when the Chinese government changed its currency practices.
“It’s crystal clear that labeling China as a ‘currency manipulator’ is just a cheap excuse for some in Washington to launch a protectionist war,” Xinhua said. “It is also unfair and unwise to try to make China a scapegoat for the economic problems of America’s own making.”
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