July 21, 2006
US senators warn China they may revive tariff bill
WASHINGTON (Reuters) - Two U.S. senators warned Beijing on
Friday they could demand a vote on their bill threatening China
with steep U.S. import duties because of the scant progress it
has made revaluing its currency.
"China could clearly do more, and if this pace continues,
we will have no choice but to call up our bill for a vote
before Congress adjourns for the year," Sens. Charles Schumer,
a New York Democrat, and Lindsey Graham, a South Carolina
Republican, said in a joint statement.
Schumer and Graham are co-authors of bill threatening China
with 27.5 percent tariffs on its exports to the United States
if it does not significantly revalue the yuan against the
dollar. The legislation enjoys broad congressional support, and
the senators already have put off a vote on the bill several
times to give Beijing more time to act.
Their joint statement came on the first anniversary of
China's decision to raise the value of its currency by 2.1
percent to 8.11 per dollar. The yuan was freed at the same time
from a dollar peg to float against a basket of reference
currencies within managed bands.
The yuan ended Friday at 7.9820 per dollar, its highest
close since its revaluation one year ago.
"We are still very disappointed in the pace of appreciation
-- 1.5 percent in a year -- given that China recently reported
that its economy is growing at 11 percent annually and has
posted record trade surpluses," the senator said.
China's initial revaluation last year "has had no negative
impacts on the Chinese economy and shows the world that China
is ready to allow their currency to significantly appreciate,"
the senators said.
U.S. manufacturers contend the yuan is undervalued by 15 to
40 percent, giving Chinese an unfair advantage in world trade.