Rep. Levin taking inclusive approach on China currency

“After he testifies, I’m going to sit down and talk with this Committee and with the leadership and with the Senate as well as with the administration in deciding the next step,” Levin told reporters. “I think the Treasury secretary’s testimony tomorrow is very, very important, and so all of us await his testimony.” 

Levin earlier today heard from fellow lawmakers on the need to address the currency issue. Last June, China vowed to allow more flexibility in its exchange rate, but has yet to make good on that promise. 

The country’s currency is undervalued by as much as 40 percent, according to several sources, which gives Chinese companies an advantage in the global marketplace by making their goods artificially cheaper to buy. 

“This means Chinese goods entering the U.S. market and competing against U.S. goods are receiving an effective subsidy of up to 40 percent,” Rep. Tim Ryan (D-Ohio) said in testimony prepared for today’s hearing. 

“It also means that U.S. goods being shipped to China are being hit with an effective tariff of up to 40 percent. For those of us who believe in a free market, China’s policy of deliberately keeping its currency artificially weak is anything but market-based,” he said.

Levin has introduced the Currency Reform for Fair Trade Act that would combat currency manipulation by providing special subsidies and tariffs to offset its effect on markets. The bill was created with China in mind. 

However, the chairman said he will not advance the bill until after he speaks with the administration. 

“I think the first consideration has to be where the administration is and then a decision on next steps,” he said. “That is basically what has to happen.” 

Still, Levin has not ruled out asking the World Trade Organization (WTO) to clamp down on China.

“I think that going to the WTO remains a very viable alternative,” he said. “It should have been done long ago.”

Senate Finance ranking member Chuck Grassley (R-Iowa) agreed with the congressman. 

“The administration should go one step further and bring a case against China’s unfair currency manipulation at the WTO,” the senator said in prepared remarks. “Everyone knows China is manipulating its currency to gain unfair advantage in international trade, and that violates China’s obligation under the General Agreement on Tariffs and Trade.”

Congressional attention on China comes as the Obama administration filed two WTO cases against China earlier today. 

One case focuses on China’s discriminatory policies toward U.S. suppliers of electronic payment services, and the other deals with the country’s anti-dumping and countervailing duties on imports of certain steel products from the U.S.