The battle over a U.S. Senate bill to admonish China for alleged currency manipulation has several lawmakers pushing for a vote next week on the measure that they say will strengthen trade and increase jobs.
The bill would require the U.S. Commerce Department to investigate if a country is undervaluing its currency, and help affected U.S. companies to seek retaliatory tariffs on goods imported from the country.
But the measure offers nothing newer in finding domestic problems in foreign economies than did previous currency-related bills.
Whenever election campaigns approach, especially at a time when the U.S. trade and job market is struggling to find a way up, it seems Chinese currency policies will be subject to complaints.
Now, with the 2012 presidential election race is about to start, the Chinese yuan is drawing criticism from some American lawmakers.
The criticism sounds quite reasonable and attractive to voters when a bill links foreign currencies to economy and employment. Those lawmakers, however, should sincerely examine their view that tough measures against trade partners concerning currency appreciation will boost U.S. exports and stimulate the domestic job market.
Obviously, appreciation of the yuan would not help reduce the U.S. trade deficit and create jobs. It's generally agreed, too, that structural problems in America rather than the Chinese currency are responsible for America's economic difficulties.
Chris Chocola was more rational than some lawmakers when his U.S. free-trade group, the Club of Growth, opposed legislation against the yuan. When Chocola, president of the Club for Growth, argued with those lawmakers' tones about boosting jobs and trade by beating Beijing, he understood China as an important trade partner willing to take measures to cooperate with the United States on trade expansion and economic recovery.
Texas Gov. Rick Perry also declined to support the bill and his spokesman Mark Miner called it "a free trade issue."To put it simply, current anti-yuan moves in the U.S. Senate are more like a publicity attempt to attract voters and distract attention from the real problems facing the U.S. economy.
Lawmakers targeting the yuan should well recognize that, besides China, the United States has trade deficits with about 90 other countries, and China cannot shoulder a multilateral problem.
On the bill aimed at chastising China with specious and groundless reasoning, it should also be well recognized that trade conflict always leads to bilateral damage. As important trading partners for each other, the United States and China have much potential for trade expansion.
U.S. exports would rise even more rapidly if Washington ends restrictions on exports of various types to China. That's while China has been pushing aggressive pro-consumption policy stimulus measures to absorb surplus savings. That effort could give the United States enormous opportunities to boost exports to China and create jobs.
At a time when the world economy might enter a new danger zone, all countries should act to stimulate business through free trade initiatives. The move to push the currency bill through the U.S. Senate is obviously on the wrong track as it will offer little help in creating jobs or trade expansion. Instead, it could deteriorate the economic problems the country is facing now.