House votes to allow sanctions to stop currency shenanigans

WASHINGTON — The House of Representatives voted 348 to 79 Wednesday to send a strong pre-election, bipartisan message to China: Stop manipulating your currency to keep it artificially low or the U.S. will get tough and move against you.

The vote, among the strongest ever threatening retaliation against China for its currency policy — which benefits Chinese exporters and burdens U.S. producers — was intended largely as a political stand that lawmakers in hard-hit economic areas could trumpet back home before the Nov. 2 congressional elections.

However, experts warned, Congress also could look to the outside world like it's willing to risk triggering a trade war that could badly wound an already weakened U.S. economy.

"This is a stronger message than any previous one," said Nicholas Lardy, a China expert at the Peterson Institute of International Economics, an economic research group. "So the question is 'What is China's perception?' If they say the bill is unlikely to go anywhere, nothing will come of it.

"But if they think it will become law, there could be significant retaliation. You could see contracts that go to Boeing go to Airbus, for example."

Boeing is based in Chicago, while Airbus is a European consortium. Both manufacture aircraft.

The bill is unlikely to become law. The Senate won't consider the measure before mid-November. The Obama administration has taken no position on the bill.

Still, by failing to oppose such a measure, as previous presidents have, silence could signal to the world that the administration's open to tough trade retaliation.

Share This Story