By Michael O'Brien - 09/22/10 08:21 PM EDT
Democrats will push forward late this week with a bill to address the impact of Chinese currency manipulation.
The House Ways and Means Committee will hold a mark-up on Friday of legislation meant to impose tariffs against Chinese goods due to the undervaluation of the yuan. Small manufacturers and unions have been pressing for the action. They argue China's artificially low currency lowers the cost of its exports to the U.S., hurting U.S. companies and workers.
The Obama administration has lobbied against the legislation, though recent remarks by Treasury Secretary Tim Geithner suggested the administration's patience with China on the issue was wearing thin.
Some rank and file Democrats have argued the currency bill could help their party with voters in the mid-term elections, and House Speaker Nancy Pelosi (D-Calif.) hailed the markup.
"For years, the Bush Administration, the Obama Administration, and Members of Congress have tried to persuade the Chinese government to allow its currency to respond to market forces. No significant progress has been made," she said in a statement. "It is time for Congress to pass legislation that will give the Administration leverage in its bilateral and multilateral negotiations with the Chinese government – so that U.S. businesses and workers have a more level playing field in world trade."
Similar legislation has stalled before in Congress, spurred by different administrations who are sensitive to the strong economic ties the U.S. and China face through trade.
It is unclear whether legislation will make it to the House floor for a vote, but committee action alone would be a significant statement that would be likely to anger China. A leadership aide said a floor vote is under discussion.
Democrats from Rust Belt states where manufacturers have been hit hard by increased trade with China are among the legislation's strongest supporters. Many of those lawmakers are facing tough reelection challenges from Republicans.
Leaders in the House have been pushing aid to those struggling districts through their "Make it in America" initiative, which Pelosi referenced in her statement. The Chinese currency bill is " a key part of our ‘Make It In America’ agenda," the speaker said, "that would address currency manipulation by foreign governments, including the Chinese government.
Rep. Tim Ryan (D-Ohio) and Rep. Tim Murphy (R-Pa.) are the lead sponsors of the legislation to be considered by Ways and Means. The bill would allow the Commerce Department to consider currency manipulation when calculating anti-subsidy duties on imports.
Some Republicans along with business groups have expressed opposition to the legislation. They say it could violate World Trade Organization rules and might lead to retaliation from China.