Senate Passes China Currency Sanctions Bill

The Senate approved legislation (S. 1619) last week that would require the U.S. to impose punitive tariffs on imports from countries found to be subsidizing their exports by undervaluing their currencies. The bill is specifically aimed at China, which critics claim artificially devalues its currency, making it difficult for U.S. companies to compete against relatively less expensive Chinese goods. The American Chemistry Council and dozens of other business groups oppose the measure, warning it could provoke a trade war between the two countries. Legislation that would increase tariffs on imports from China would likely “result in retaliation against U.S. exports into China—currently the fastest-growing market for U.S. exports,” the groups said in a letter last month to Senate leaders. President Barack Obama has not taken a formal position but has expressed concern that the bill may violate international trade rules. The legislation now goes to the House of Representatives, where it faces an uphill fight.