U.S. leaders took swipes at China on Thursday, as the Senate voted to
advance a bill to penalize countries said to be manipulating their
currencies and President Barack Obama accused the country of
manipulating the yuan.
WSJ's Michael Crittenden looks at a proposed
U.S. Senate bill that would compel the Obama Administration to levy
tariffs against China and other countries for their 'misaligned'
currencies. Photo: STR/AFP/Getty Images
U.S. Trade
Representative Ron Kirk separately demanded that China disclose details
to the World Trade Organization on a large number of government
subsidies to ensure it is complying with global trade rules. The U.S.
notified the WTO of almost 200 subsidy programs China has failed to
disclose, as well as 50 India measures.
The Senate's currency bill would compel the Obama administration to
levy tariffs and other penalties against China and other countries for
having "misaligned" currencies. The measure reflects lawmakers' concerns
that China holds down the value of its currency, the yuan, in an effort
to boost the country's exports.
The Senate was expected to vote to
pass the currency measure Thursday night, but Democrats and Republicans
got into a scuffle over how to wind down debate on the bill and finish
voting on amendments to the measure. The breakdown occurred after Senate
Majority Leader Harry Reid (D., Nev.) attempted to limit the ability of
Republicans to bring up politically sensitive amendments, prompting
objections from Senate Minority Leader Mitch McConnell (R., Ky.). The
vote is now scheduled for Tuesday at the earliest.
Mr. Obama's rare public criticism of
China came at a White House news conference earlier in the day where he
accused China of manipulating the yuan and taking other actions to
bolster its growth at the expense of the rest of the world.
"China has been very aggressive in gaming the trading system to its
advantage and to the disadvantage of other countries, particularly the
United States," Mr. Obama said. But the president also expressed
reservations about the Senate's bill, suggesting it could violate
America's international treaty obligations on trade. He also
acknowledged China has allowed some appreciation in the yuan but said
"it's not enough."
The growing focus on China comes as
lawmakers worry about the faltering U.S. economy and its role in the
elections, a scant 13 months away. China's management of the yuan has
long bothered policy makers, particularly those from manufacturing
states, who insist that Beijing holds down the value of its currency to
benefit Chinese exports to the detriment of U.S. companies.
In the Senate, 62 lawmakers, including
a dozen Republicans who broke with their leadership, voted to end
debate and move to the final stages of debate on the China bill. "We are
in a trade war. We have our clocks cleaned every day and lose jobs
every day because of unfair Chinese practices," Sen. Charles Schumer
(D., N.Y.) said on the Senate floor.
Thursday's vote was much closer than a
similar tally taken Monday, when 79 senators voted to move ahead with
the legislation. The bill lost significant Republican support because of
GOP anger at being unable to offer amendments to the bill. Led by Mr.
McConnell, 19 of the 31 Republican lawmakers that had voted in favor of
the measure on Monday switched to vote against it. But Mr. McConnell was
unable to sway enough Republicans to defeat the measure.
Sen. Jeff Sessions (R., Ala.), a
supporter of the legislation, said it was one of the first times he had
split with his leadership to vote with Democrats. He said he expected
more Republicans to vote for the bill when it comes to a final vote.
In the House, the China issue is
resonating with both Republicans and Democrats; a total of 226
lawmakers, which would be enough to pass the bill, have signed on to a
House version of the currency bill. They include 61 Republicans who have
bucked warnings from House Speaker John Boehner (R., Ohio) that the
legislation is "dangerous."
Mr. Boehner and Republican leaders are trying to tamp down an effort
to bring the bill to the floor via a so-called discharge petition, which
allows a majority of rank-and-file lawmakers to override leadership and
bring legislation up for a floor vote.
A number of influential business
groups, ranging from the U.S. Chamber of Commerce to the Business
Roundtable, have warned taking action against China could result in
retaliation, undermining any potential gains to the U.S. economy.
"I don't think now is the right time to
embrace a trade war," said Sen. Claire McCaskill (D., Mo.), who opposes
the currency bill.
—Tom Barkley and Siobhan Hughes
contributed to this article.
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