New GOP Lawmakers Want Action on China Currency

[WestVirginiaRebel]

Fox News:

WASHINGTON -- Chinese President Hu Jintao's high-profile visit to Washington this week comes as newly elected Republican lawmakers are itching to act against what they see as an undervalued Chinese currency that is costing American jobs.

But they could run into resistance from their own party. In fact, Congress may be less likely to pass legislation on the issue than it had been last year, when both chambers were under Democratic Party control. A bill to give U.S. companies a means of challenging what they view as an unfair export subsidy sailed through the House of Representatives then, but died in the Senate.

The new House speaker, Rep. John Boehner, voted against the bill. Rep. Dave Camp, now chairman of the House Ways and Means Committee that would screen any such legislation, voted in favor, but has appeared unenthusiastic about focusing strictly on currency while ignoring trade barriers and other issues. Without the support of such senior Republicans, the bill may never reach the House floor for a vote.

Still, with unemployment at 9.4 percent and a presidential election looming in 2012, the issue won't go away. It is a priority for many lawmakers from both parties, including some new ones from the ultraconservative tea party movement that has reinvigorated the Republican Party -- and isn't afraid to challenge its leaders.

Charles Freeman, a former U.S. trade negotiator with China, was struck by the eagerness of new lawmakers to act when he participated in a recent briefing for them. "This is a crowd that is anxious to do something," he said.

U.S. manufacturers say the Chinese government intervenes in currency markets to hold down the value of the yuan against the dollar by as much as 40 percent, making Chinese products cheaper for Americans while increasing the price of U.S. goods in China. Since China announced it would allow more flexibility in its exchange rate last June, the yuan has appreciated just 3 percent against the dollar. China's leaders say relaxing currency controls too abruptly would damage its financial system, hurt its exporters and wipe out Chinese jobs.
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I'm not sure what they can do, short of starting a trade war that could backfire.