- The Washington Times - Friday, October 7, 2011

The Senate on Thursday cleared a key procedural hurdle on a bill that would punish China for its currency valuation, setting up a final vote despite some Republican opposition and a lukewarm response from the White House.

Supporters of the measure say China artificially undervalues its currency, letting the Asian giant sell its goods cheaper than U.S. companies can.

“This practice — which gives Chinese exports an unfair advantage on the global market — hurts American manufacturers and cheats American workers out of jobs,” said Senate Majority Leader Harry Reid, Nevada Democrat.

The measure, sponsored by Democrats and Republicans, would allow compensatory tariffs to be imposed on goods from countries that are deemed to be undervaluing their currency.

The Senate voted Thursday to advance the bill on a vote of 62-38. Mr. Reid, who initially wanted a vote on final passage late Thursday or Friday, scheduled a vote for next week in order to give senators time to cool off after a heated partisan dust-up on the Senate floor Thursday evening.

Chinese officials, as well as some members of Congress, have warned the bill — if it becomes law — could ignite a trade war between the two nations.

“There’s no question that China manipulates its currency. But I don’t believe this bill would bring any production to the U.S. or create one job here in America,” said Sen. Bob Corker, Tennessee Republican. “This approach is a typical Washington, cut-your-nose-off-to-spite-your-face response that would prove counterproductive.”

The bill presents a thorny problem for President Obama. Many in his political base want to take steps to punish China for its economic policies, 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 White House said that while it shares the legislation’s goal of seeking a more level trade playing field with China, it has concerns with the Senate Democrats’ push to challenge China over the value of its currency.

“Aspects of this legislation do … raise concerns about consistency with our international obligations, and we are in the process of discussing those issues with members of Congress,” White House press secretary Jay Carney said Wednesday.

It was the administration’s most specific position yet on the bill, which Mr. Reid has been pursuing instead of working on the president’s $447 billion jobs package.

If the bill clears the Senate, it would be sent to the House, where it has bipartisan support. But House Speaker John A. Boehner has denounced the measure, calling it “dangerous.”

“For the Congress of the United States to pass legislation to force the Chinese to do what is arguably very difficult to do, I think, is wrong,” the Ohio Republican said.

• Dave Boyer and Stephen Dinan contributed to this article.

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