By Brandon Moseley
Alabama Political Reporter
On Tuesday, February 10, US Sen. Jeff Sessions (R-Alabama) introduced the Currency Undervaluation Investigation Act. Sen. Sessions introduced the legislation along with Senators Sherrod Brown (D-Ohio), Charles E. Schumer (D-New York), Lindsey Graham (R-South Carolina), Debbie Stabenow (D-Minnesota), and Richard Burr (R-North Carolina). According to information from Sessions’ office the legislation would protect U.S. manufacturing jobs by cracking down on illicit currency devaluation which the Senators claim artificially advantages foreign producers over American producers.
Sen. Sessions said in a written statement, “America has always been a trading nation, but a trade relationship is like a contract: both parties must agree and play by the same set of rules, when one of our trading partners harms American workers by skirting the rules, we have an obligation to respond in their defense. I hope the Senate will again bring up this commonsense legislation for a vote, and I’m confident it will again pass with strong bipartisan support.”
Sen. Brown said, “Instead of addressing our growing trade deficit, we’re pursuing trade deals with countries that manipulate their currency. Foreign companies who don’t play by the rules are actively trying to undermine the effectiveness of our trade laws. It’s time to level the playing field for American manufacturers and workers—the most competitive in the world. This bipartisan bill would create jobs and ensure American business can compete—at no cost to taxpayers.”
Sen. Schumer said, “For far too long, China, Japan and other countries have rigged the rules of the game and millions of American workers have lost their jobs. While these countries have manipulated their currency, American manufacturing has been hollowed out—it’s time to put those days in the rear view mirror. If we are going to even consider passing a free trade agreement with Asian countries, Congress must pass and the President must sign a tough currency bill.”
Sen. Graham said, “It is universally accepted that China and other major countries intentionally manipulate their currency to create an advantage for themselves in the marketplace. Manufacturing jobs in South Carolina and across the country are being destroyed because the Chinese and others continue to defy the rules of international trade.”
Sen. Stabenow said, “When countries like China and Japan cheat, American workers and manufacturers lose. It’s time to stop unfair trade practices like currency manipulation and hold countries accountable when they don’t play by the rules.”
Sen. Burr said, “With more US jobs at stake every year, we must stand up to protect Americans from unfair trade practices by countries who fight dirty via currency manipulation. This legislation to hold those countries accountable is long overdue.”
According to Sen. Sessions office, the Peterson Institute estimates that that interventions in currency markets by foreign governments may have cost US workers as many as five million jobs over the last decade by subsidizing their exports and making it more difficult for US exporters to compete in other countries. The Economic Policy Institute estimated that ending currency manipulation could reduce the US trade deficit by as much as $500 billion within three years, would increase the GDP by as much as $720 billion, create as many as 5.8 million American jobs and lower the federal budget deficit by as much as $266 billion.
The Currency Undervaluation Investigation Act would use U.S. trade law to counter the economic harm to US manufacturers caused by currency manipulation by imposing a tariff on those imports.
The bill would provide consequences for countries that fail to eliminate currency misalignment. The bill would require that the US Commerce Department treat currency manipulation as an illegal subsidy and impose applicable duties.
Under current laws, when the Commerce Department and the International Trade Commission find that subsidized imports are giving foreign manufacturers an unfair advantage over are causing economic harm to American manufacturers and workers, the administration must impose duties on those imports to offset (“countervail”) the benefit conferred on foreign producers and exporters by the government subsidies.
The Senators said that the Department of Commerce already has authority to investigate whether currency undervaluation by a government provides a countervailable subsidy, but has repeatedly failed to do so.
The Currency Undervaluation Investigation Act requires that the Department of Commerce to investigate whether currency undervaluation by a government provides a countervailable subsidy when a US industry requests an investigation and provides the proper documentation.
