Washington, D.C. – Today, Congressman Marion Berry for and the House passed H.R. 2378, the Currency Reform for Fair Trade Act, which gives the government effective tools to address the unfair trade practice of currency manipulation by foreign countries, including China. The bill makes clear that additional tariffs can be imposed to offset the effects of a “fundamentally undervalued” currency under U.S. trade remedy laws.
The bill consists of two important provisions: it reverses a current Department of Commerce practice that has precluded it from treating foreign government currency manipulation as an export subsidy; and it directs the Department of Commerce on how to measure the subsidy provided to foreign producers through currency undervaluation.
Members of Congress, U.S. businesses, and workers are concerned that the Chinese government has intervened in world markets, causing its currency to be undervalued by as much as 25 to 40 percent. This unfair trade practice translates into a significant subsidy, artificially making Chinese imports into the United States much cheaper and U.S. exports to China much more expensive, jeopardizing efforts to create and preserve manufacturing jobs in America.
“China’s currency manipulation has a direct effect on American manufacturers’ export markets, creating an unfair competitive advantage for China,” Berry said. “If China allows its currency to respond to free market forces, as it should, we will be in a position to create a million new jobs and cut our trade deficit by $100 billion a year. The American people deserve, as any other country does, a fair playing field in the world trade markets.”
