US Lawmakers Not Satisfied With Bush Administration’s Efforts to Reduce Deficit With China | Voice of America - English
U.S. lawmakers say they are losing patience with Bush administration attempts to reduce the U.S.
Democratic Senator Charles Schumer, who is from New York, and South Carolina Republican Lindsey Graham testified to the Senate Finance Committee. Senator Graham accused China of artificially undervaluing its currency, the renminbi, and making it "almost impossible" for American products to compete in the global marketplace. "When you look from New York and South Carolina, if you are in the manufacturing business, you see an advantage given to Chinese products - 20 to 40 percent, based on the currency alone," Graham said. In his testimony, Senator Schumer said Bush administration efforts, led by Treasury Secretary Henry Paulson, have failed to resolve economic differences with China. "Secretary of Treasury Paulson, a man I have great respect for, is trying to talk to the Chinese," he said. "Like his predecessors, he is learning, you will get a lot of talk and very little action. We have to take some action." Senators Schumer and Graham last year co-sponsored legislation that would have imposed a 27.5 percent tariff on imports from China, unless Beijing took steps to significantly raise the value of its currency against the U.S. dollar. The two lawmakers dropped their bill, following a trip to China last year. In the meantime, Beijing slightly freed up the Chinese currency, which gained more than six percent in value. Speaking to reporters outside of the hearing, Senator Schumer said the previous bill was tough and served its purpose by getting China to raise the value of its currency, but he said China should do more and that is why a new bill is needed. "Our previous bill was intended to get people's attention," he said. "It was intended to be a lever to move the Chinese and it achieved a bit of its goal. As we said, we do not believe the 6.6 percent would have happened without it. But our new legislation is going to work." Senator Schumer said congressional staffs are consulting with the U.S. Treasury Department, to develop legislation that is "strong," "tough," and compliant with World Trade Organization rules. He said it will be introduced in the next several months. The U.S. trade deficit with China last year reached a record $232 billion. At a Senate Finance Committee hearing Tuesday that examined the overall U.S.-China economic relationship, Republican Senator Charles Grassley said he believes the trade imbalance cannot be blamed on China alone. The trade deficit is "very much a function of U.S. consumption." "In America, the consumer is king. And there is a lot about what their desires are that the United States [government] is not going to able to give any direction to," he said. He said that even if the United States were to reduce its trade deficit with China, it would just distribute that deficit to other countries in Asia, unless American consumption patterns changed.