Despite bipartisan support in the Senate for a bill to punish China for its currency policies, House Speaker John A. Boehner hasn’t backed down on his opposition to the measure, causing doubt whether it will get a vote in the GOP-controlled House.
Mr. Boehner, Ohio Republican, told reporters Wednesday that while he has concerns regarding how China values its currency, “what I don’t believe is appropriate is for the Congress of the United States to take this issue up and to do it within a legislation form.
“Given the volatility in the world markets, given the uncertainty in the world economy, for the Congress of the United States to be taking this step at this moment in time poses a very severe risk of a trade war and unintended consequences that could come as a result.”
Mr. Boehner didn’t say whether he would allow the bill to come to the House floor for a vote, which likely would get some — and possibly significant — support from his Republican caucus.
The Senate on Tuesday passed a bill on a 63-35 vote that would allow compensatory tariffs to be imposed on goods from countries that are deemed to be undervaluing their currency. While the bill — which received the support of 16 Republicans — doesn’t name China directly, its main target is clearly the Asian giant.
Economists say China’s currency, the yuan, is undervalued by at least 25 percent to 30 percent against the U.S. dollar. That means that Chinese goods sold in the United States become 25 percent to 30 percent cheaper, and U.S. goods exported to China that much more expensive.
Mr. Boehner also took a shot at President Obama for failing to give a position on the bill.
“While the president’s out campaigning instead of governing, it’d be nice for the president of the United States to make clear what his position,” he said. “It’s time for the president to lead.”
But the bill presents a thorny problem for the White House. Many in Mr. Obama’s political base want to take steps to confront China for its economic policies and its massive trade surplus with the United States, but presidents also try to keep as free a hand as possible in the conduct of foreign relations, and having a policy dictated from Capitol Hill could be problematic. The move also risks retaliation from Beijing, which is the largest foreign holder of U.S. Treasury debt.
The White House has implied that Mr. Obama wouldn’t sign the bill if it passes both chambers as written.
Rep. Dave Camp, Michigan Republican, who is House Ways and Means Committee chairman, said his panel will hold a hearing soon on several issues regarding U.S. trade with China. He said the committee also will “take a look at” the China currency issue, but he stopped short of saying if he would allow the Senate bill — or a similar measure — to be drafted and voted on.
“We have a complex relationship with China, an important relationship with China, and [it’s] much more than just the China currency issue,” Mr. Camp said. “We’re going to take a multifaceted, thoughtful approach.”