The Senate has voted 79 to 19, to move to a bipartisan bill that curbs currency manipulation from countries such as China. Both Democrats and Republicans co-sponsored the legislation.
Called the Currency Exchange Rate Oversight Act of 2011, the legislation provides tools that impose consequences on countries that manipulate their currencies.
The legislation is particularly important in terms of U.S.-China trade. China has significantly de undervalued the yuan, giving its goods an unfair advantage in the global marketplace. Its currency manipulation is hurting American workers, many of whom are manufacturers the U.S. can’t afford to lose.
As Thomas Gibson, President and CEO of the American Iron and Steel Institute, once explained: “Beijing uses mercantilist and market-distorting industrial practices, like undervaluing its currency, to give its producers an unfair export advantage over global competitors.”
American businesses should be able to compete on a level playing field, particularly at a time when U.S. unemployment rates remain high.
From 2001 to 2010, our nation has lost nearly 2.8 million jobs due to our trade deficit with China. In ten states, American jobs lost or displaced to China exceeded 2.2% of total employment.
Experts estimate that if China were to revalue its currency, more U.S. jobs would stay at home.
The Economic Policy Institute estimates that if China revalued the yuan by 28.5%, U.S. GDP growth would support 1,631,000 U.S. jobs. And if other Asian countries revalued their currency, too, we could support 2,250,000 jobs could be created.
According to Mark Zandi of Moody Analytics, “Nothing is more important from a macroeconomic perspective for manufacturing, then to get these currencies better aligned.”
There is no reason the Senate shouldn’t pass this job creation bill.
As Senator Reid put it, “this legislation that we’re going to move to will even the playing field, help American goods compete in a global market field and help keep American jobs here at home.”