- The Washington Times - Tuesday, September 9, 2003

ASSOCIATED PRESS

A group of Republican and Democratic senators said yesterday they will push for tariffs on imports from China if the Chinese government does not take steps to let its currency float freely on world markets.

“It’s a shot across the bow,” said Sen. Jim Bunning, Kentucky Republican.

Chinese goods would face a 27.5 percent American tariff and China would lose its special trading status under the senators’ bill, designed to prod China into changing its practices.

The lawmakers argue that China unfairly undervalues its currency, making goods produced in China less expensive and making foreign imports too costly for Chinese consumers.

The Chinese yuan has been fixed at about 8.28 to the dollar since 1994. It is allowed to fluctuate, but only in tiny increments and in trading closely regulated by official agents. Lawmakers and some economists say the fixed rate may be 15 percent to 40 percent less than the currency’s value.

Sen. Richard J. Durbin, Illinois Democrat, said the fixed currency gives China an unfair trade advantage and draws manufacturing jobs away from the United States.

“The Chinese are using currency manipulation as a lethal loophole for America’s manufacturing jobs,” he said. “It is tantamount to imposing a tariff on American products because of their manipulation of their currency.”

U.S. manufacturing has lost nearly 16 percent of its work force, or 2.7 million jobs, in a record 37 straight months. Another 44,000 jobs were lost last month.

China maintains that a stable yuan benefits both nations and makes good financial sense. China’s prime minister offered Treasury Secretary John W. Snow no promises when Mr. Snow traveled to Beijing in July to press Chinese officials on their currency policies.

The senators said they hoped their bill imposing tariffs will see action next month if China does not take steps toward letting the value of its currency fluctuate more freely.

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