–Key Senator Blasts China’s ‘Overt and Continuous’ FX Manipulation
–But Schumer Is Calling For Senate To Pass Different Bill Than House
–U.S. ‘Must Call Their Bluff’ On Currency
–Admin Too Willing To Engage China In ‘More Talk’

By John Shaw

WASHINGTON (MNI) – Sen. Chuck Schumer, a leading Senate advocate of
currency legislation directed at China, said Tuesday he will press the
Senate to take up a currency bill that he has drafted when it returns to
Washington for its Lame Duck legislative session in mid-November.

In a speech on the Senate floor, Schumer blasted China for what he
called “overt and continuous manipulation of its currency,” and said
legislation is needed soon.

“This issue can’t wait for another year,” he said.

However, Schumer is calling on the Senate to take up a bill that is
different from the currency bill the House will vote on Wednesday.

So even if Schumer were able to get the Senate to pass a currency
bill after the election — hardly a sure thing — it would likely pass a
bill that is different from the House version.

So neither approach would become law.

“This bill is not about bashing China. It’s about defending the
United States,” Schumer said.

Schumer said the U.S. must “call their (China’s) bluff” on currency
manipulation.

He said the Obama administration has been too willing to engage the
Chinese government in “more talk” on currency issues.

The House will vote Wednesday on a bill that would clarify current
law to allow the Commerce Department to impose countervailing duties on
Chinese goods to offset the effect of the country’s currency policies.

“Countervailing duties would be available to any U.S. industry that
could demonstrate it has been ‘materially injured’ by imports from the
country with the undervalued currency. By doing so, the bill will help
to provide meaningful relief to those who are harmed by China’s exchange
rate policy,” the author of the bill, House Ways and Means Committee
Chairman Sander Levin, said last week.

Levin said the bill is “fully consistent” with World Trade
Organization rules. WTO rules, he said, allow for the application of
countervailing duties to offset or neutralize export subsidies. He said
that so far the Commerce Department has refused to find currency
manipulation a countervailable export subsidy for the sole reason that
non-exporters, such as American tourists in China, benefit from the
undervalued currency as well.

Levin said the bill preserves the Commerce Department’s authority
to consider each case on its merits and to make a judgement as to
whether all the necessary legal elements of an export subsidy are met.

** Market News International Washington Bureau: 202-371-2121 **

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