NEW: Senator Reed Helps Crack Down on Chinese Currency Manipulation
Tuesday, October 04, 2011
In an effort to create American jobs and crack down on China’s currency manipulation, a bipartisan group of U.S. Senators, including Jack Reed, is seeking to strengthen U.S. trade laws to counter China’s artificially weak currency, which harms manufacturers in Rhode Island and throughout the nation.
For years the Chinese government has maintained its currency at an artificially low value to keep China's exports cheap and make American imports to China more expensive. “Chinese economic and trade policy is hurting the U.S. economy and costing Rhode Island jobs. It has got to stop. This bill sends a clear bipartisan message that the U.S. will hold China accountable for its currency and market manipulation. The Chinese currency needs to fully reflect market forces. We can’t afford to sit back and allow China's currency manipulation to continue distorting global markets and putting American workers and companies at a competitive disadvantage,” said Reed, an original cosponsor of the bill.
Last night, the U.S. Senate voted 79-19 to advance the Currency Exchange Rate Oversight Reform Act of 2011. Passage and enforcement of the bill could help lead to the creation of 1.6 million American jobs.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTA recent report from the Economic Policy Institute (EPI) estimated that if the Renminbi and Satellite currencies were revalued to their equilibrium level, up to 2.25 million jobs could be created through an increase in U.S. Gross Domestic Product (GDP).
According to the EPI study, 11,890 jobs across Rhode Island have been erased over the last decade due to the surging trade deficit with China, which continues growing at over 14% annually. A separate economic study by researchers at the Massachusetts Institute of Technology (MIT) found that from 1990-2007 the Providence metropolitan area was one of the most vulnerable communities to cheap Chinese imports.
The Currency Exchange Rate Oversight Reform Act of 2011 is intended to reform and enhance oversight of currency exchange rates by triggering tough consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment and ensuring tools, such as the U.S. trade laws, may be used to counter the economic harm to U.S. manufacturers caused by currency manipulation.
The Senate is expected to vote on final passage of the bill later this week. The bill must then be passed by the U.S. House of Representatives before it can be sent to the President.
