US bill may impose sanctions on Chinese goods
The lines “Made in China” are causing quite a stir in the United States.
Last Friday, the United States’ Ways and Means committee backed a bill allowing duties to be placed on Chinese imports. The bill will be brought before the entire House of Representatives for a vote later this week.
Derek Hall, a political science professor at Wilfrid Laurier University, stated, “[The US] is looking for easy targets. China is manipulating their currency, there’s no room for argument there, but it’s unlikely that if [the US] got what they wanted it would solve all their problems.”
The congressional committee viewed the legislation as a way to counter China’s “undervalued currency.” Increasingly, China has been accused of keeping their currency artificially low, thus making their exports cheap. This has been particularly a concern for the United States, underpinned by their dismal manufacturing industry and gloomy economy.
House Majority Leader Steny Hoyer issued a statement on Friday expressing that “while a multilateral approach to addressing this issue is preferable, we cannot wait any longer to level the playing field for U.S. businesses and protect American manufacturing jobs.”
With rare bipartisan support even more sanctions may be applied to China over the next few months with November mid-term elections looming and the economy being the primary concerns for many Americans.
Nevertheless, critics argue that instead of blaming Chinese monetary policy, the US should address internal issues such as overspending, low-savings rates, enormous military expenses, and printing too much money.
Hall explained that while many of the products that China exports to the United States are assembled in China, they contain parts produced in a wide range of countries. If even if the Yuan was adjusted it doesn’t necessarily mean that those products made in China will be now made in the United States. Rather, the US may simply import those products from other parts of South East Asia.
US President Barack Obama recently met with Chinese Premier, Wen Jiabao, after a United Nations meeting in New York last week. Obama called China an “outstanding partner” while Wen stated that that the common interests between China and the US “far outweigh” the differences.
Obama has previously taken a strong stance against Chinese currency manipulation but has not officially commented on this piece of legislation.
The bill currently has 155 co-sponsors and is strongly supported by the Chairman of the Ways and Means Committee, Rep. Sander Levin, a democrat who represent a district in Detroit.
The bill has not been officially passed, as it first needs to be voted on by the entire House of Representatives and obtain approval of the Senate.