Congress recently introduced a pair of bi-partisan bills aimed at holding foreign countries accountable for manipulating currency to skirt fair trade rules. Last week, the Senate introduced the Currency Undervaluation Investigation Act, and the House of Representatives contributed the Currency Reform for Fair Trade Act.
The text of the latter bill reads that its intent is “[t]o amend title VII of the Tariff Act of 1930 to clarify that countervailing duties may be imposed to address subsidies relating to a fundamentally undervalued currency of any foreign country.”
According to the Committee to Support U.S. Trade Laws (CSUSTL), “Both bills would require the Department of Commerce, during an unfair trade investigation, to examine whether and the extent to which a government’s currency manipulation provides a countervailable subsidy to its industries. Domestic producer parties would have to request such an examination and provide documentation to support an allegation of currency manipulation.”
A report by the Peterson Institute for International Economics states that foreign government currency market intervention and manipulation has resulted in an approximate loss of as many as five million U.S. jobs over the last 10 years. An analysis by the Economic Policy Institute, meanwhile, estimates that eliminating currency manipulation would create up to 5.8 million American jobs—40 percent of which would be in the manufacturing sector. It would also reduce the goods trade deficit by at least $200 billion, according to the report.
“CSUSTL has long supported efforts to control the rampant currency manipulation by countries like China that continue to not play by the rules,” CSUSTL president Terry Stewart says. “CSUSTL believes this legislation is a critical and necessary step in protecting the hardworking American workforce from the effects of unfair trade practices. CSUSTL supports this bipartisan effort and will advocate for passage of a currency bill that will end this trade distorting practice.”