Don Manzullo joined congressional colleagues to define undervalued currency as an illegal export subsidy. The 16th District Congressman’s press release follows:
Manzullo Votes to Crack Down on Unfair Chinese Trade Practices
that Put Americans Out of Work
[WASHINGTON] On a mission to level the global playing field for U.S. manufacturers, Congressman Don Manzullo (R-IL) today voted to give the federal government a new tool to penalize China and other foreign countries that illegally undervalue their currencies to make their companies more competitive at a cost to U.S. manufacturers and agricultural producers.
The Currency Reform for Fair Trade Act (H.R. 2378), which the House passed 348-79 this afternoon, would define foreign currency undervaluation as an illegal export subsidy actionable under U.S. trade law. It would allow the U.S. to slap countervailing duties on any country deliberately undervaluing its currency for a trade advantage. Click here to view Manzullo’s floor speech today on the issue.
“For years, China and other countries have undervalued their currencies to give their companies a competitive advantage over U.S. manufacturers, encouraging offshoring of U.S. jobs and putting Americans out of work,” said Manzullo, co-founder of the House Manufacturing Caucus and an original cosponsor of the bill.
“This legislation would give Americans a tool to strike back against these unfair trade practices, level the playing field for our industry, and put Americans back to work. I have no doubt that American manufacturers and farmers can compete with anyone in the world, but the competition must be fair.”
Most countries in the world allow their currencies to “float” so they are valued by market conditions. China and a few other Asian countries take actions to weaken the value of their currencies.
A lower currency makes it less expensive for a foreign company to import its goods into the United States. A lower currency also makes U.S. exports more expensive in that country. In the United States, this has contributed to the influx of Asian imports and offshoring of U.S. jobs.
Economists estimate China’s currency undervaluation alone gives Chinese products a 15-40 percent competitive advantage over products made in the United States. The Peterson Institute for International Economics estimates that correction of all Asian currency undervaluations would cut our trade deficit by about $100 billion and generate approximately 700,000 U.S. jobs.
Manzullo has been extremely active in cracking down on Asian currency undervaluation practices, going back to 2003. Manzullo previously authored a House Resolution to urge the Executive Branch to use all available means to force various Asian nations to stop manipulating their currencies to the detriment of U.S. manufacturers and agricultural producers.
Manzullo and Senator Olympia Snowe (R-ME), former chairs of the House and Senate Small Business Committees, also instructed the General Accounting Office to conduct an investigation to quantify the damage currency manipulation causes to U.S. industry.
Manzullo has held several committee hearings on the issue of currency manipulation and has testified on numerous occasions for the need to halt foreign currency undervaluation to level the playing field for U.S. manufacturers and farmers.