House passes bill aimed at Chinese Currency

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WA_Vol

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NEW YORK (CNNMoney.com) -- Lawmakers say China's currency is unfairly cheap and passed a measure Wednesday that opens the door to tariffs that aim to help U.S. companies compete.The legislation, which authorizes the Commerce Department to impose duties on imports from countries with undervalued currencies, passed the House of Representatives by a vote of 348 to 79. The Senate, however, is not expected to take up the issue until later this year.

The bill got support from both sides of the aisle, a rarity in recent sessions, with Democrats framing the legislation as a jobs issue.

China said this year it would allow its currency, the yuan, to trade in a wider range against the dollar. But the currency has scarcely appreciated since then, inflaming critics who charge the undervalued yuan helps steal U.S. manufacturing jobs.

Estimations on the undervaluation of the yuan vary depending on the economic model used, but one estimate by the Peterson Institute of International Economics puts the number at about 24% against the dollar.

That undervaluing makes Chinese goods cheaper to buy in the United States and likewise drives up the price of U.S. goods sold in China.

The resulting imbalance is a major factor contributing to the U.S. trade deficit, the president said.
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House passes bill designed to combat undervalued currencies - Sep. 29, 2010
 
#2
#2
I'm not an expert on this stuff but I don't see that this will do much good. Doubt it will have any effect on jobs and simply make the goods we buy more expensive.
 
#3
#3
Not sure if its good or bad in the end, but I would think Walmart goods would be more expensive if Chinese currency was accurately valued.
 
#4
#4
I know there is no easy way but one day I hope we can figure out a way to bring back the manufacturing to this country. Not only does it keep our economy healthy but it also is a security thing. If we are at war with China, I have my doubts they'll have their sweatshops banging out tanks for us.
 
#5
#5
OrangeYankee said:
I know there is no easy way but one day I hope we can figure out a way to bring back the manufacturing to this country. Not only does it keep our economy healthy but it also is a security thing. If we are at war with China, I have my doubts they'll have their sweatshops banging out tanks for us.
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Maybe not, but I bet those "Happy Meal Toys" will keep on coming.
 
#7
#7
This is stupid. We are currently not in a position to be sparking a trade war with China. If the bastards in congress really wanted to get serious, they would tackle our massive debt, through which, China pretty much owns us.
 
#9
#9
Chattaben said:
What do Americans value more, cheap goods or American jobs?
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So you're naive enough to think this potential 24% move in their currency makes our overpriced, under educated workforce competitive with Chinese labor.
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#11
#11
overseasorange2 said:
Or increase imports from Vietnam or the likes.
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I meant to include that. I don't see how this will change must in our overall trade deficit though it may reduce the trade deficit with China. It's simply not enough to return manufacturing of the types of products we buy from overseas.

The flip side is we need to consider what this will do to the Chinese willingness to buy our debt.
 
#12
#12
BigPapaVol said:
So you're naive enough to think this potential 24% move in their currency makes our overpriced, under educated workforce competitive with Chinese labor.
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We managed before we gave China "favored trading status" in 1980. That was a great decision........for them. In 30 years they almost own us.
 
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