TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Obama hits China on trade; cautious on currency bill

President Barack Obama accused China on Thursday of “gaming” international trade by keeping its currency weak, but was cautious about a bill before the US Senate aimed at pressing Beijing to revalue the yuan

Doug Palmer and Matt Spetalnick (The Jakarta Post)
Washington
Sat, October 8, 2011

Share This Article

Change Size

Obama hits China on trade; cautious on currency bill

P

resident Barack Obama accused China on Thursday of “gaming” international trade by keeping its currency weak, but was cautious about a bill before the US Senate aimed at pressing Beijing to revalue the yuan.

The legislation, which calls for US tariffs on imports from countries with deliberately undervalued currencies, will head toward a final Senate vote on Tuesday after efforts to bring action to a close faltered on Thursday.

Obama stopped short of explicitly backing the legislation and he restated concerns that any measure must comply with global trade rules. Still, in his toughest language on China to date, the president echoed the sponsors of the bill.

The measure, which has drawn warnings from Beijing that it could trigger a trade war, is still widely expected to pass.

“China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States,” Obama told a news conference focused on his bid to revive a weak US economy.

“Currency manipulation is one example of it,” he said.

Obama, who faces a tough bid for re-election next year, did not say whether he would sign or veto the legislation if it reached his desk. Both the Senate and the House of Representatives would have to approve the measure first.

“My main concern ... is whatever tools we put in place, let’s make sure that these are tools that can actually work, that they’re consistent with our international treaties and obligations,” Obama said.

“I don’t want a situation where we’re just passing laws that are symbolic knowing that they’re probably not going to be upheld by the World Trade Organization,” he said.

The authors of the bipartisan Currency Exchange Rate Oversight Reform Act insist the bill complies with WTO rules.

Many economists say China holds down the value of its yuan currency to give its exporters an edge in global markets. China says it is committed to gradual currency reform and notes that the yuan has risen 30 percent against the dollar since 2005.

The Senate voted 62-38 on Thursday to curtail debate and send the bill toward a final vote in that chamber following a dispute between Republicans and Democrats over which amendments would be considered.

Supporters say that decision, which required a super-majority of 60, virtually guarantees Senate approval, but the bill faces stronger opposition in the House where it may never face a vote.

“For the Congress of the United States to pass legislation to force the Chinese to do what is arguably very difficult to do I think is wrong, it’s dangerous,” House Speaker John Boehner said on Thursday.

“You could start a trade war,” he warned.

Some bill supporters, such as Senator Sherrod Brown, a Democrat from Boehner’s home state of Ohio, say that won’t happen because China can’t afford a trade war with a country that annually buys more than US$300 billion of its goods.

Others argue the United States is already in a battle for its economic life and not doing enough to defend it self.

“We’re in a trade war,” said Brian O’Shaughnessy, chairman of 210-year-old Revere Copper in Rome, New York, a maker of copper and brass products used in electrical, construction and other markets, who backs the legislation. “We’re in an economic war for jobs and we’re not fighting it. We’re losing it.”

Boehner has the power to block the bill in his chamber, even though backers of the legislation say it has 225 House co-sponsors, including 61 Republicans — enough for passage if it came to a vote.

House Democratic leader Nancy Pelosi lost no time in stepping up pressure on the Republican leader.

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.