MIDDLE CLASS TAX CUTS: Senate Democrats Passed Legislation to Cut Taxes for 114 Million Middle Class Families. Senate Democrats led the passage of legislation to extend middle-class tax cuts for the 98% of Americans making less than $250,000, preventing a $1,600 tax hike on 114 million middle-class families. House Republicans are willing to add nearly $1 trillion to the deficit and hit 25 million families with a tax hike by ending credits for raising children and paying for college. [Vote 184, 7/25/12; National Economic Council, 7/12]

FARM BILL: Senate Democrats Passed Legislation to Strengthen the Rural Economy. In June, Senate Democrats passed the Agriculture Reform, Food and Jobs Act, which would invest in successful jobs initiatives, help increase export opportunities, make it easier for farmers to sell locally and access capital, support innovation in bio-manufacturing and bio-energy, and support farmers and small businesses owners who have suffered disasters, while saving tens of billions of dollars in waste, fraud, and abuse. American agriculture supports 16 million jobs. [Vote 164, 6/21/12; Senate Agriculture, Nutrition, and Forestry Committee, 6/12]

POSTAL REFORM: Senate Democrats Passed Legislation to Modernize the United States Postal Service. In April, Senate Democrats passed legislation to modernize the postal service and give it the flexibility to maintain critical functions while adapting to changes in the way people use the mail system. The United States Postal Service is the country’s second largest civilian employer and sustains over 8 million jobs. The House has been idle in the face of the Post Office’s first ever default – on $5.5 billion of future retiree health benefits. [Vote 82, 4/25/12;Envelope Manufacturers Association, 3/11; Reuters, 8/2/12]

VIOLENCE AGAINST WOMEN ACT : Senate Democrats Passed Legislation to Reduce the Incidence of Violence Against Women.  In April, Senate Democrats passed reauthorization of the Violence Against Women Act, which enhanced emphasis on prevention and response to sexual assault and extended VAWA protections to all Americans.  House Republicans have been unwilling to act on the Senate’s bipartisan, inclusive bill. In the time since the Senate passed its bill, there have been over 1.2 million incidents of violence against women. [Vote 87, 4/26/12; CQ, 4/26/12]

CHINA CURRENCY: Senate Democrats Passed Legislation to Crack Down on China’s Cheating and Level the Field for American Workers. In October of 2011, Senate Democrats passed the Currency Exchange Rate Oversight Reform Act, which improves currency oversight and includes tougher consequences for breaking the rules. Revaluing China’s currency could create over 1.6 million jobs. [Vote 159, 10/11/11; EPI, 6/17/11]

“For too long China has been using underhanded tactics to manipulate its currency at the expense of American workers and businesses. They deserve a level playing field. This bipartisan bill levels that playing field, and could support up to 1.6 million American jobs.

“I commend my Republican colleagues who joined with Democrats to pass this important bill. I join my colleague, Senator Graham, in calling on the House to take up this bill and pass it quickly.”

The legislation, called the Currency Exchange Rate Oversight Act, provides tools to impose consequences on countries that manipulate their currency and consequently, cost us jobs.

Our nation simply can’t afford to have American jobs shipped overseas because some countries impose unfair trade practices. By making its goods artificially less expensive than they really are, countries manipulating their currency gain an unfair advantage in the global marketplace.

China’s currency manipulation, for example, has already cost three million American jobs — two million of which came from our manufacturing sector.
The bill that passed tonight could create 1.6 million American jobs.
As Nevada Senator Harry Reid put it: “American businesses don’t need special advantages to compete. They just need an even playing field.”

Currency manipulation not only costs jobs, it can lead to unsustainable trade deficits. Our trade deficit with China has jumped from $10 billion in 1990 to $273 billion today.

We hope this common-sense, bipartisan bill will pass in the House. It’s time to put an end to this unfair trade practice, and put Americans back to work.

Today I have the pleasure of welcoming a special guest from Nevada, the Reverend D. Edward Chaney, who just delivered an eloquent invocation.

Pastor Chaney is originally from South Carolina, but for the past two years he has led the flock of the Second Baptist Church in Las Vegas, Nevada.

He is also very involved with the Las Vegas community, serving on the board of the local chapters of the Urban League and the NAACP.

In addition to his tremendous service to the Southern Nevada community, he also served in the Navy for four years, and recently retired as Chaplain of the U.S. Air Force Reserve at Nellis Air Force Base.

I welcome Pastor Chaney and his wife, Avis, to Washington. Thank you, Pastor Chaney, for the inspiring invocation, which I hope it will guide the Senate’s actions today.

This morning the Senate will hold a vote to advance legislation to end the underhanded practice of currency manipulation by the Chinese government.

This practice – which gives Chinese exports an unfair advantage on the global market – hurts American manufacturers and cheats American workers out of jobs.

And it has helped balloon America’s trade deficit with China from $10 billion to $273 billion in the last 20 years, costing 3 million American jobs.

Two million of those lost jobs came from the manufacturing sector, which can’t compete as long as the Chinese government gives its exporters special advantages.

This legislation is a chance to even a tilted playing field, pump $300 billion into our economy in two years and support 1.6 million American jobs.

That’s why it has the support of labor unions and business groups. That’s why it advanced with an overwhelming, bipartisan vote on Monday.

I would remind my Republican colleagues that, since the Senate began debate of this bill, China has made no move to correct the value of its currency. It is clear that merely considering Congressional action will not solve this problem.

Democrats have offered to work with Republicans on agreement to consider several germane amendments, and we stand by that offer.

Thirty-one Republicans voted to advance this legislation earlier this week.

I am hopeful my colleagues on the other side will continue to work with us in a bipartisan fashion to advance this important, job-creating legislation today.

#1 The bill will save jobs

Senator Richard Blumenthal (Conn.): “China has been manipulate its currency, flagrantly and blatantly, at the expense of our businesses around the country, and most blatantly and flagrantly at the expense of American workers. This measure is necessary to protect American jobs and American workers.”

Senator Sherrod Brown (Ohio): China “devalues their currency, they underappreciate it, meaning they in a sense get a bonus.  When they sell anything to the U.S., anything, they get a 25% discount. They undercut American manufacturers that could be even more efficient than they are.”

Senator Sheldon Whitehouse (R.I.): “The consequences of currency manipulation are deeply felt… by families who for generations have contributed to our growth as a nation by going to work every day and building things from cars and boats to toys and electronics.”

Senator Jack Reed (R.I.): “Unemployment throughout my home state of Rhode Island and the nation has been persistently high and is caused in part by the effects of currency manipulation, particularly Chinese devaluation of the yuan”

Senator Hagan (N.C.): It’s “The time for playing games with American jobs is over… the effects of China’s currency manipulation are damaging to our economy.”

Senator Harry Reid (Nev.) : “This is important jobs legislation.. The Senate is demanding justice for American companies”

#2 It’s a step toward economic recovery

Senator Sheldon Whitehouse (R.I.): “A Rhode Island textile manufacturer CEO told me, ‘Addressing china’s manipulation of its currency would be a good first step to bringing our trade policy to where it needs to be, to help get American manufacturers moving in the right direction again.’”

Senator Jack Reed (R.I.): “The effects of unfair currency manipulation has resulted in distorted trade balances that have hurt U.S. workers and our nation’s economy as a whole.”

#3  Our trade deficit’s only getting worse

Senator Schumer (N.Y.): “The Chinese only understand one thing. Being tough, telling them if they don’t discontinue these actions, we are going to take action unilaterally on our own.. China’s policies get worse and worse and worse.”

Senator Levin (Mich.): “This is an unfair trade practice that contributes to large U.S. trade deficits”

Senator Cardin (Md.): “The legislation provides necessary mechanisms to help halt currency manipulation committed by any country.”

Reagan Administration Trade Official: “China Engages In Currency Manipulation.” Robert E. Lighthizer, who served as a deputy U.S. Trade Representative in the Reagan administration, testified, “China engages in currency manipulation – a major form of trade protectionism not explicitly prohibited under the WTO agreements… the U.S. government should treat currency manipulation as a subsidy for purposes of our CVD law.  In addition, the United States should officially designate China as a currency manipulator, challenge China’s currency manipulation at the International Monetary Fund (“IMF”),and bring a WTO case on the grounds that currency manipulation is a prohibited export subsidy.” [U.S.-China Economic and Security Review Commission, 6/9/10]

• Reagan Administration Trade Official Criticized Conservatives Who Consider Cracking Down on China a “Liberal” Idea. After some conservatives questioned Republicans who wanted to “get tough on China” in 2011, former Reagan administration trade official Robert Lighthizer wrote, “can anyone really think that getting tough with China is a ‘liberal’ idea? Do you think that any of the conservatives and Republicans listed above would allow a foreign adversary to use currency manipulation, subsidies, theft of intellectual property and dozens of other forms of state-sponsored, government-organized unfair trade to run up a more than $270 billion trade surplus with us and to take U.S. jobs?” [Washington Times, 5/9/11]

Former Treasury Official: Value of Renminbi is 20%-30% Less Than What It Should Be. Former Assistant Treasury Secretary C. Fred Bergsten wrote, “The artificially low value of the renminbi — it is 20 to 30 percent less than what it should be — amounts to a subsidy on Chinese exports and a tariff on imports from the United States and other countries… If we want to avoid bankruptcy and raise growth, we have got to attack the trade deficit.” [New York Times, 9/28/11]

• Bergsten: “I Regard China’s Currency Policy As The Most Protectionist Measure Taken By Any Major Country Since World War II.” “I regard China’s currency policy as the most protectionist measure taken by any major country since World War II,” said C. Fred Bergsten, head of the Peterson Institute for International Economics. “Its currency manipulation by our estimates has it undervalued by 20 percent to 30 percent. That’s equivalent to a 20 to 30 percent subsidy on all exports and a tariff on all imports by the largest trading country in the world.” [Washington Post, 10/4/11]

Economists: Any Benefits of China Trade Have Been “Wiped Out” By Increased U.S. Government Costs, Including Unemployment Benefits and Food Stamps. In a newly released study, a team of three economists “rated every U.S. county for its manufacturers’ exposure to competition from China, and found that regions most exposed to China tended not only to lose more manufacturing jobs, but also to see overall employment decline. Areas with higher exposure also had larger increases in workers receiving unemployment insurance, food stamps and disability payments. The authors calculate that the cost to the economy from the increased government payments amounts to one- to two-thirds of the gains from trade with China. In other words, a big portion of the ways trade with China has helped the U.S.—such as by providing inexpensive Chinese goods to consumers—has been wiped out. And that estimate doesn’t include any economic losses experienced by people who lost their jobs. “ [Wall Street Journal, 9/27/11]

Krugman: China Currency Policy “Damages the Rest of the World.” Paul Krugman wrote in 2010, “China’s policy of keeping its currency, the renminbi, undervalued has become a significant drag on global economic recovery. Something must be done… it’s a policy that seriously damages the rest of the world. Most of the world’s large economies are stuck in a liquidity trap — deeply depressed, but unable to generate a recovery by cutting interest rates because the relevant rates are already near zero. China, by engineering an unwarranted trade surplus, is in effect imposing an anti-stimulus on these economies, which they can’t offset.” [New York Times, 3/14/10]

• Krugman: Taking Action on China Currency Can Help Alleviate National Jobs Crisis. Paul Krugman wrote, “The dire state of the world economy reflects destructive actions on the part of many players. Still, the fact that so many have behaved badly shouldn’t stop us from holding individual bad actors to account.  And that’s what Senate leaders will be doing this week, as they take up legislation that would threaten sanctions against China and other currency manipulators… Ben Bernanke, the chairman of the Federal Reserve, said it clearly last week: unemployment is a ‘national crisis,’ with so many workers now among the long-term unemployed that the economy is at risk of suffering long-run as well as short-run damage. And we can’t afford to neglect any important means of alleviating that national crisis. Holding China accountable won’t solve our economic problems on its own, but it can contribute to a solution — and it’s an action that’s long overdue.” [New York Times, 10/3/11]

Zandi: Currency Manipulation Creates a “Significant Competitive Disadvantage for All Manufacturers.” Mark Zandi of Moody’s Analytics explained, “Nothing is more important from a macroeconomic perspective for manufacturing, then to get these currencies better aligned. They are not aligned and that’s a significant competitive disadvantage for all manufacturers, increasingly other businesses as well.” [JEC Hearing, 6/22/11]

Samuelson: China’s Currency Policies Contributed to the U.S. Financial Crisis.  Columnist Robert J. Samuelson wrote, “China and others are implicated in the dollar system’s failings. By keeping their currencies artificially depressed—a way to aid exports—they abetted the very imbalances that they now criticize… It’s not just that exchange rates were (and are) misaligned. American economists have argued that a flood tide of Chinese money, earned from those bulging trade surpluses, depressed interest rates on U.S. Treasury securities and sent investors searching for higher yields elsewhere. That expanded the demand for riskier securities, including subprime mortgages, and pumped up the real-estate bubble. So China’s policies contributed to the original financial crisis (though they were not the only cause) as well as to Americans’ excess spending.” [Newsweek, 4/3/09]

Today the Senate begins another very busy work period. I am confident it will be productive.

Tonight, the Senate will vote to begin debate on legislation to curb China’s unfair currency manipulation. I expect strong, bipartisan support to move this legislation forward.

My colleagues – both Democrats and Republicans – agree that China’s deliberate actions to devalue its currency give its goods an unfair competitive advantage in the marketplace. That hurts our economy and it costs American jobs.

In the last decade alone, we have lost 2 million American jobs to China because of a trade deficit fueled by currency manipulation. That massive trade deficit is one reason for our unsustainable unemployment rate.

This legislation will even the playing field and help American goods compete in a global market – and keep American jobs here at home.

Democrats believe there is no problem facing this nation that deserves our attention more than our jobs crisis. This bill is part of the effort to get our economy back on track and put Americans back to work.

If China stops the practices that artificially tip the scales in its favor, it would support 1.6 million American jobs.

I hope this legislation will motivate China to stop devaluing the yuan on its own. I also know it will send a strong message to the Chinese that America will no longer ignore their blatant, unfair trade practices.

We expect to wrap up work on China currency legislation this week. We have a lot to get done this month, so the Senate must move quickly.

One out of every nine Federal judgeships remains vacant, which puts at risk the right of every American to a fair and speedy hearing. While I have been frustrated at the Senate’s slow pace in confirming judicial nominees this Congress, I am pleased that we have been able to reach an agreement to confirm 10 judges this week and next.

These nominations are non-controversial and have the unanimous support of the Judiciary Committee. Five of the six judges we will confirm today come from states with Republican senators. All five have the support of these Republican Senators.

This month the Senate will also take up three appropriations bills. Last month we passed a continuing resolution to fund the government through November 18. Now we must finish our work on annual appropriations bills.

We will also take up three trade bills this work period.

Last month the Senate passed Trade Adjustment Assistance legislation, which helps U.S. workers who lose their jobs because of international trade learn new skills and reenter a changing workforce.

A global economy means global competition. And a flexible, well-trained workforce is the only thing that will allow us to keep pace with our rivals.

That is why Democrats insisted on passing Trade Adjustment Assistance before we would take up those the three trade bills we will soon consider.

Republicans have said these trade agreements are important to them. Yet for months they prevented them from moving forward by stalling TAA. I hope the House will not delay any longer.

The Senate will also take up President Obama’s American Jobs Act this month.

Members of both parties should rally behind the common-sense, bipartisan approach of this legislation. It would cut taxes for working families and small businesses to spur job creation and put Americans to work restoring this nation’s decaying roads, bridges and schools.

I am happy to work with my colleagues on both sides of the aisle to improve this bill. But I hope the obstructionism Republicans have employed for the last nine months will not continue.

This year Democrats have introduced jobs bill after jobs bill. Meanwhile, our Republican colleagues have puts their own political agenda ahead of the nation’s jobs agenda.

They have claimed they are willing to work in a bipartisan fashion to get our economy back on track. This month they have yet another chance to prove this.

I urge my Republican friends to remember that actions speak louder than words.

I hope they will take time out from rooting for our economy to fail for the sake of politics and help Democrats put this nation back to work.

10 Senators Represented More Than 100 Million Americans, 1/3 of US Population

Washington, DC–A bipartisan delegation of 10 United States Senators returned home Monday night following a week’s worth of meetings with high-level Chinese government officials, business leaders, U.S. Foreign Service officers and Peace Corps volunteers.

The historic delegation, led by Senate Majority Leader Harry Reid of Nevada, represented more than a third of the U.S. population and included some of the most senior members of the Senate. The delegation included Assistant Majority Leader Dick Durbin (D-Ill.), Charles Schumer (D-N.Y.), Richard Shelby (R-Ala.), Barbara Boxer (D-Calif.), Mike Enzi (R-Wyo.), Frank Lautenberg (D-N.J.), Johnny Isakson (R-Ga.), Jeff Merkley (D-Ore.) and Michael Bennet (D-Colo.).

Some of the Chinese officials the Senators met with include:

• Xi Jinping, China’s Vice President, who is widely expected to succeed Hu Jintao next year as China’s next President
• Wang Qishan, Vice Premier
• Yang Jiechi, Foreign Minister
• Wu Bangguo, Chairman of the National People’s Congress, China’s legislature.
• Lu Yongxiang, Vice Chairman of the National People’s Congress
• Zhou Xiaochuan,  President of the People’s Bank of China
• Donald Tsang, Chief Executive of Hong Kong
• Florinda Chan, Acting Chief Executive and Secretary for Administration and Justice of Macau
• Ge Honglin, Mayor of Chengdu, a city with a population of 14 million that is a leader in China’s renewable energy industry

Additionally, members of the delegation met with officials from the Chinese Rail Ministry to discuss the country’s investments in high-speed rail.

Senators also received classified briefings by American officials and met with Jon Huntsman, America’s Ambassador to China; Stephen Young, Consul General in Hong Kong; and Roy Perrin, Acting Consul General in Chengdu.

In addition to meeting with government officials, the Senators met with American business leaders operating in China during luncheons with the American Chamber of Commerce and the U.S. China Business Council.

Trade, Jobs, and Currency. The primary focus of this trip centered on strengthening America’s manufacturing sector and urging a level playing field for U.S. businesses. Chinese officials confirmed that China would continue the managed appreciation of its currency and were urged by the delegation to be more aggressive. This was an important step because China’s currency policy has resulted in an unbalanced exchange rate that keeps the cost of Chinese products artificially low and the cost of U.S. exports to China unfairly high, making it difficult for U.S. businesses to compete with China in the global marketplace.

The Senators also raised strong concerns about other trade barriers that make it difficult for American companies to export and invest in China, including China’s so-called “indigenous innovation” policies.

Clean Energy. The delegation spent a great deal of time learning more about China’s aggressive investments in clean energy.  “China isn’t investing so heavily in clean energy just because it’s good for the environment – it’s doing so because it’s good for the economy,” Reid said.  “China knows clean energy creates jobs and, in reducing its reliance on oil, makes it more secure.  With our vast renewable energy resources and American ingenuity, we can’t afford not to be a globally competitive leader in this important area.  We should also look for new opportunities to collaborate on and advance clean-energy deployment here and abroad.”

International Security. As the world’s two leading economies, both nations agree there is a shared responsibility to work together to foster global security. The Senators and Chinese officials discussed the importance of stability in the Korean Peninsula and the dangers of a nuclear Iran, as well the importance of maintaining an open line of communication to address potential threats.

Human Rights. The delegation’s trip to China took place during one of the toughest human rights crackdowns in recent Chinese history, a concern that was brought up by the delegation during multiple meetings with Chinese officials. While differences of opinion remain, both sides agreed to continue discussing this issue, an encouraging step that the delegation hopes will eventually lead China to protect the internationally recognized rights to freedom of expression, religion, and association. This week China and the U.S. will have a bilateral dialogue on human rights issues.

“The world needs its two largest economies to work together. We have to communicate and build mutual trust,” Reid said.  “Our meetings in China helped improve that relationship, and our experience there was an unmistakable reminder of just how hard we have to work to make American more competitive with the rest of the world.  I thank the Chinese for meeting with us and for their gracious hospitality.”

Beijing, China – An historic delegation of ten United States Senators, led by Majority Leader Harry Reid of Nevada, met today with Wang Qishan, Vice Premier of China, Yang Jiechi, China’s Foreign Minister, and Zhou Xiaochuan, the president of the People’s Bank of China.

The meetings, which followed a briefing at the American Embassy by Ambassador John Huntsman, centered on trade, currency, cooperation on global security, human rights and clean energy.

“The relationship between the United States and China is important for our two nations, but it is also important for the world,” Reid said. “How the United States and China work together on commerce, currency and clean energy will help determine the future health of the global economy. I thank China’s leaders for meeting with us to discuss these important issues. ”

Never before has a Senate delegation this large, representing more than 100 million Americans and more than a third of the American population, traveled to China.

The group will also meet with government officials and do site visits of American investments and clean energy projects in Chengdu, Beijing and Xi’An. During meetings with Chinese officials, the group will discuss issues including clean energy, trade issues, currency, foreign policy, and human rights.

Six Ways That China Engages in Unfair Trade Practices

Below are six ways that various economists and trade experts suggest that China is engaging in unfair trade practices:

1. China demands proprietary technology from non-Chinese firms.  China recently announced a plan to force foreign manufacturers to hand over cutting-edge technology in exchange for access to the Chinese market. Under China’s so-called “indigenous innovation” program, foreign manufacturers that want access to vast swaths of China’s market are concerned they would have to enter joint ventures in which they are limited to minority stakesand share critical technologies.
2. China does little to prevent counterfeiting. China systematically ignores the manufacture and sale of counterfeit goodsof foreign products.  Piracy in China costs U.S. firms billions of dollars per year in lost sales and forceU.S. manufacturers and content providers to spend money fighting Chinese piracy.   China’s widespread counterfeiting not only harms the business interests of foreign rights holders but also can pose a direct threat to the health and safety of consumers in the United States, China and elsewhere, from contaminated pharmaceuticals and deadly food products to substandard car parts and toxic toys.
3. China continues to support illegal subsidies for domestic industries.  Despite its WTO membership, China continues to subsidize industries in direct contravention of global agreements.  In December, the Obama administration initiated a WTO case contesting the subsidies China is providing to wind power firms.  Wind power and other clean energy firmsare the industries of the future, and it is clear China has every intention of trying to subsidize its way to international leadership, instead of competing fairly with American firms.
4. China abets the dumping of underpriced goods.  Hand in hand with its illegal subsidies, the Chinese government does nothing to prevent, and often encourages, the dumping of goods on U.S and other markets.  Many Chinese exporters are state-owned enterprises whose predatory pricing practices are explicitly encouraged by government practices and policies.  When caught, Chinese exporters simply find a way to circumvent those rules as well, devising schemes such ascreating bogus new companies to ship goods,falsely declaring the country of origin or mislabeling the product.  The Chinese government is well aware of these schemes – exporters are not shy about advertising options on the internet – but willfully turns a blind eye.
5. China does not crack down on industrial espionage.  Just this month, the U.S.government announced the prosecution of a Chinese national for stealing secrets from Dow Chemical at the behest of the Chinese government.  Though China may deny it, it is hard to dispute the fact that they have certainly done little to discourage such activities.  In fact, the Congressionally appointed  U.S.-China Economic and Security Review Commission, found last year that “the Chinese government has been a major beneficiary of technology acquired through industrial espionage.”  Much of the industrial espionage from China is done through cyber attacks.
6. Chinakeepsthe Yuan artificially weakby effectivelypeggingits currency to the dollar..  By manipulating currency exchange rates, countries can gain an unfair advantage over U.S. manufacturers by effectively lowering the price of their exports.  This hurts U.S. manufacturers forced to compete at home with artificially cheap imports. Currency manipulation also imposes a direct cost on U.S. exports, making American goods sold in China more expensive and making it more difficult for U.S. exporters to compete with artificially cheap Chinese goods around the globe. This creates an unfair trade advantage, which ultimately harms manufacturers, workers, and farmers, and contributes significantly to the U.S. trade imbalance.

The Obama Administration is Working to Level the Playing Field With China. The Administration has challenged a number of China’s trade practices in front of the World Trade Organization and is actively involved in protecting U.S. firms’ competitive interests.  Eswar Prasad of the Brookings Institute writes, “With its actions and words, the Obama administration has signaled that it wants to deal with China on equal terms and will not back off from conflict where it feels that China is subverting the established rules of the game.”  Last week, Treasury Secretary Tim Geithner noted recent progress, explaining, “The United States is on track to export more than $100 billion of goods and services to China this year. Our exports to China are growing at twice the rate of our exports to the rest of the world.” [Brookings, 1/17/11; Treasury Secretary Tim Geithner, 1/12/11]

The U.S. Trade Deficit With China Has Cost America 2.4 Million Jobs, As China’s Exports Continue to Rise

U.S. Has Lost 2.4 Million Jobs Due to Trade with China. From 2001 through 2008, 2.4 million American jobs were lost or displaced due to the United States’ trade deficit with China, including 91,400 jobs in 2008 alone. [Economic Policy Institute, 3/23/10] NOTE: Click HERE for job loss numbers by state and/or Congressional district

U.S Trade Deficit With China Grew to $25.63 Billion in November; More Than $250 Billion in 2010. “U.S. exports to China hit an all-time high of $9.5 billion in November, an increase of 1.9% from the month before. But the growth in exports doesn’t begin to match U.S. imports from China, which rose 0.9% to $35.12 billion. This pushed the overall U.S. deficit with China up 0.5% to $25.63 billion.” For the first eleven months of 2010, the U.S. trade deficit with China totaled $252 billion. [U.S. Department of Commerce, Bureau of Economic Analysis, 1/13/11; Wall Street Journal, 1/14/11; MarketWatch, 1/13/11]

China’s Exports Rose 31% in 2010. China’s December 2010 exports rose 17.9 percent to $154 billion. Overall in 2010, China’s exports rose 31.3 percent over 2009 to $1.58 trillion. This trade imbalance is far from a recent trend; China’s exports to the U.S. have exceeded its imports since 1990.  Still, China is extremely reliant on the U.S. economy as China’s exports of goods and services to the U.S. currently account for 35 percent of the country’s gross domestic product.  Although Chinese imports are steadily increasing across the board, computers and electronics account for the largest share of imported goods from China. [AP, 1/10/11; Center for American Progress, 12/22/10; Brookings, 1/11]

Perpetuating This Trade Imbalance Threatens Our Security. In a speech to the U.S.-China Business Council last week, Secretary of Commerce Gary Locke implored our government and business community to closely examine current trade policies, explaining, “The gross trade imbalances between our countries are a good place to start, because they have the potential to threaten global stability and prosperity.”  The U.S. cannot continue on this“debt-fueled consumption binge.” [Commerce Secretary Gary Locke, 1/13/11]

China’s Currency Manipulation Hurts U.S. Competitiveness. China’s unwillingness to allow its currency to rise in value is hampering U.S. competitiveness in the global marketplace and harming the Chinese economy, Treasury Secretary Timothy F. Geithner said last week. “Beijing’s currency policies remain the most contentious economic issue between China and Washington. By keeping the value of its currency low, China gives its exporters an advantage by making their goods cheaper on the international market.” [Washington Post, 1/12/11]

China Is Accused of Providing Unfair Subsidies to Energy Companies, Hurting American Manufacturers. In December 2010, the Obama administration “filed a case against China with the World Trade Organization, accusing Beijing of providing unfair government subsidies to Chinese energy companies. The case is in response to a petition from the United Steelworkers union in September. The union alleged that Chinese businesses are able to sell wind and solar equipment on the international market at lower prices than their competitors can because they receive subsidies. The administration’s WTO case alleges that the subsidies are in violation of global trade rules… U.S. Trade Representative Ron Kirk said the type of subsidies the Chinese government employed were ‘particularly harmful and inherently trade distorting.’” [AP, 12/23/10]

International Trade Commission Found That China’s Intellectual Property Infringement and “Indigenous Innovation” Policies Hurt U.S. Businesses. A recent report conducted by the U.S. International Trade Commission, and requested by Senators Baucus and Grassley, noted: “Intellectual property rights (IPR) infringement in China reduces market opportunities and undermines the profitability of U.S. firms when sales of products and technologies are undercut by competition from illegal, lower-cost imitations. Intellectual property (IP) is often the most valuable asset that a company holds, but many companies, particularly smaller ones, lack the resources and expertise necessary to protect their IP in China. ‘Indigenous innovation’ policies, which promote the development, commercialization, and purchase of Chinese products and technologies, may also be disadvantaging U.S. and other foreign firms and creating new barriers to foreign direct investment (FDI) and exports to China.” [U.S. International Trade Commission, November 2010; Senate Finance Committee Press Release, 12/13/10]

China is Racing the U.S. on Education and Innovation

American Students Are Falling Behind While Chinese Students Thrive. According to a recent report from the Organisation for Economic Co-operation and Development (OECD) looking at how students in 65 countries perform in math, science and reading, the United States ranks 15^th in reading, 23^rd in science and 31^st in math. China ranked at or near the top in all three categories. [OECD, PISA 2009 Results]

China is Set to Surpass U.S. in Patent Filings This Year. China bucked an unprecedented decline in global patent filings in 2009, boosting its total by 29.7 percent, while the United States saw a fall of 11.4 percent, the world patent watchdog WIPO said in 2010. In October, Thomson Reuters issued a report forecasting that China would surpass the United States in patent filings in 2011. [Reuters, 2/8/10; Thomson Reuters, 10/5/10]

China Expects Double Digit Growth in 2010

China Expects 2010 Economic Growth to Reach 10%. In the third quarter of 2010, the U.S. economy rose 2.6%. The U.S. economy grew just 1.7% in the 2^nd quarter of 2010 and 3.7% in the 1^st quarter. Meanwhile, a Chinese government official reported that China’s 2010 economic growth was estimated to reach 10% when final numbers are released. [Bureau of Economic Analysis, accessed 1/10/11; UPI, 1/4/11]

Economists Predict China’s Economy Could Overtake U.S. in 2020. In December, The Economist reported, “When Goldman Sachs made its first forecasts for the BRIC economies (Brazil, Russia, India and China) in 2003, it predicted that China would overtake America in 2041. Now it says 2027. In November Standard Chartered forecast that it will happen by 2020. This partly reflects the impact of the financial crisis. In the third quarter of 2010 America’s real GDP was still below its level in December 2007; China’s GDP grew by 28% over the same period.” [The Economist, 12/16/10]

Key Legislation

The China Currency Exchange Rate Oversight Reform Act of 2010:  Sponsored by a bipartisan group of 20 Senators led by Senator Chuck Schumer, Senator Debbie Stabenow and Senator Lindsey Graham, this legislation would provide less flexibility to the Treasury Department when it comes to citing countries for currency manipulation. It would also impose stiff new penalties on designated countries, including tariffs on the countries’ exports and a ban on any companies from those countries receiving U.S. government contracts.  The sponsors have announced their plans to reintroduce this Congress. For more information on this bill, please see: http://schumer.senate.gov/new_website/record.cfm?id=323135&&&search_field=currency%20exchange.

The Currency Reform for Fair Trade Act: Last Congress, Senators Sherrod Brown and Snowe introduced the House-passed currency bill (HR 2378) as an amendment to the tax extenders legislation.   The legislation, which directs the U.S. Department of Commerce to treat currency undervaluation as a prohibited export subsidy, would ensure the government is equipped to respond on behalf of American workers and manufacturers by imposing countervailing duties on subsidized exports from countries like China.  (HR 2378 passed the House by a vote of 348-79 last September.)  For more information on the Brown-Snowe proposal for this Congress, please see: http://brown.senate.gov/newsroom/press_releases/release/?id=349DE095-6495-4363-9929-71FC7FE67299.

Foreign Manufacturers Legal Accountability Act:Sponsored by Senator Sheldon Whitehouse, the Foreign Manufacturers Legal Accountability Act requires foreign companies that manufacture and import consumer goods to designate an agent for service of process in the United States and to consent to the jurisdiction of courts in the state where the agent is located.  In doing so, it ensures that foreign manufacturers that injure Americans can be held accountable in our country, protecting American consumers and leveling the playing field so that American manufacturers can compete fairly and keep creating good American jobs. For more information on this bill, please see: http://whitehouse.senate.gov/newsroom/press/release/?id=995055cc-5976-4b17-8bb1-a68f574b0107

The ENFORCE Act: Chinese suppliers are increasingly engaging in fraud and other complicated schemes to evade and circumvent the special U.S. duties that are in place to protect domestic manufacturers from China’s unfair trade practices. Sponsored by Sen. Wyden, the ENFORCE Act would hold Customs and Border Protection more accountable to investigating allegations of duty evasion so that U.S. producers are no longer harmed by this rampant circumvention of U.S. law. For more information on this bill, please see: http://wyden.senate.gov/newsroom/press/release/?id=3ae656bd-ef29-4bbf-b392-04961bc927bd

For more information, please see:

Senator Wyden’s Report on U.S. Trade in Environmental Goods, Updated 12/14/10 http://wyden.senate.gov/download/?id=b06d7ac2-1067-4606-8cf1-a17ba1d7b750