U.S. Lawmakers Step Up Pressure on China Over Currency Valuation

Lawmakers from both parties took swipes at China on Thursday ahead of a Senate vote to advance a bill to penalize countries said to be manipulating their currencies, with House members pressuring their leaders to follow suit.

U.S. Trade Representative Ron Kirk separately demanded that China disclose details to the World Trade Organization on a large number of government subsidies to ensure it is complying with global trade rules. The U.S. notified the WTO of almost 200 subsidy programs China has failed to disclose.

The currency bill would compel President Barack Obama administration to levy tariffs and other penalties against China and other countries for having "misaligned" currencies. The measure reflects lawmakers' concerns that China holds down the value of its currency, the yuan, in an effort to boost the country's exports.

The Senate was expected to vote to pass the currency measure Thursday night, but Democrats and Republicans got into a scuffle over how to wind down debate on the bill and finish voting on amendments to the measure. The breakdown occurred after Senate Majority Leader Harry Reid (D-Nev.) attempted to limit the ability of Republicans to bring up politically sensitive amendments, prompting objections from Senate Minority Leader Mitch McConnell (R-Ky.). The vote is now scheduled for Tuesday at the earliest.

China's currency policies also drew rare public criticism from Obama, who accused China of manipulating the yuan and taking other actions to bolster its growth at the expense of the rest of the world.

"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 said during a news conference. The president expressed reservations about the Senate's bill, suggesting it could violate America's international treaty obligations on trade matters. He also acknowledged China has allowed some appreciation in the yuan but said "it's not enough."

The growing focus on China and its policies comes as lawmakers worry about the faltering U.S. economy and its role in the elections, a scant 13 months away. China's management of the yuan has long bothered policy makers, particularly those from manufacturing states, who insist that Beijing holds down the value of its currency to benefit Chinese exports to the detriment of U.S. companies.

To read more on this story, see The Wall St. Journal article here.