House Lashes Out at China


WASHINGTON—The House of Representatives by a wide margin passed legislation to penalize China’s foreign-exchange practices, sending a powerful warning to Beijing but risking a response that could harm U.S. companies and consumers.

The measure would allow, but not require, the U.S. to levy tariffs on countries that undervalue their currencies, which makes their goods cheaper relative to American products. A majority of Republicans lined up with Democrats to pass the bill on a 348-79 vote, highlighting lawmakers’ long-simmering frustration with Chinese trade practices as well as their sensitivity to the faltering U.S. economic recovery with an election looming.

The vote marks the strongest trade measure aimed at China to make it through a chamber of Congress after more than a decade of threats by lawmakers. But despite the broad support Wednesday, dim Senate prospects make it unlikely the measure would become law this year.

Chinese Commerce Ministry spokesman Yao Jian said Thursday it would be a breach of World Trade Organization rules to conduct antisubsidy investigations based on exchange-rate concerns, according to the official Xinhua news agency. He said China is willing to take joint actions with the U.S. to help balance trade flows between the two countries, but he said China doesn’t undervalue its currency to obtain a competitive advantage.

Wang Baodong, a spokesman for the Chinese embassy in Washington, on Wednesday criticized the House vote for politicizing the issue. He stressed the importance of trade relations between the two countries and urged lawmakers to “refrain from making excuses for practicing trade protectionism against China, so as to avoid further harming the overall China-U.S. economic cooperation and their trade relations.”

The Obama administration didn’t endorse the measure, nor did it work with House negotiators out of concern for being tagged as secretly approving of the move. Nevertheless, the bill gives the White House another tool to pressure China to boost the value of its currency, the yuan.

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