Congress will act if China and the Obama administration do not respond to China's inflexible currency practices by meetings of the Group of 20 leading economies, House Ways and Means Committee Chairman Sandy Levin (D-Mich.) warned during a recent hearing on Chinese trade and industrial policies. The G-20 is meeting June 26-27 in Toronto .
"All of these policies have a common thread: they have the purpose or the effect of tilting the playing field to favor Chinese companies and against U.S. companies, workers and farmers," Levin said. He said the problematic trade policies did not establish a sound or sustainable basis for a mutually sustainable U.S.-China trade relationship. He noted that for every dollar of U.S. exports to China , China exported three to four dollars worth of products and services to the United States .
Lawmakers are particularly anxious about China 's industrial policy that advances the interests of its own economy at the expense of U.S. productivity. A pegged exchange rate, weak intellectual-property rights and policies that favor domestic industries over foreign bidders are eroding U.S. opportunities in the world's fastest-growing economy.
Legislators have drafted a bill that would allow retaliatory measures to be taken against countries such as China , if practices are deemed discriminatory. Sen. Chuck Schumer (D-N.Y.) says the Senate could take up the Currency Exchange Rate Oversight Reform Act as soon as the week of June 21.. The bill has been referred to the Banking Committee and has bipartisan support.
Senate Finance Committee Chairman Max Baucus (D-Mont.) also has scheduled a hearing on the subject for June 23 that would feature U.S. Trade Representative Ron Kirk and Commerce Secretary Gary Locke.
The House Ways and Means and Senate Finance committees have jurisdiction over U.S. trade policy in their respective chambers.
