Congressional lawmakers are primed for another run at passing legislation to crack down on currency manipulation in the wake of recent exchange-rate shocks in China.
A sharp devaluation of the yuan is bringing pressure from Capitol Hill on the White House to address global currency practices or risk greater opposition to President Obama’s global agenda.
Rep. Tim Ryan (D-Ohio), who is one of dozens of lawmakers insisting that currency be more adequately addressed in trade deals, acknowledged that China’s actions are providing the boost lawmakers need to revive the issue next month.
“We can use the momentum from the last few news cycles to resuscitate this idea and get it moving again,” Ryan told The Hill in a phone interview.
Ryan said China’s actions “have gotten everyone refocused” on legislation that would punish countries for deliberately undervaluing their currency to make their products cheaper in the United States.
His legislation, among other similar bills in the House and Senate, would penalize currency manipulation the same way as countries that use subsidies to dump their products into the United States at artificially low prices.
U.S. companies can already seek remedies to punish importers using subsidies.
Ryan argued that the president needs the extra tools, like the threat of countervailing duties, to fight currency manipulation, which some lawmakers argue have cost millions of U.S. jobs and created a persistently high trade deficit, especially with China.
The best shot for tougher currency language, though, is probably in a customs enforcement bill that the House and Senate are expected to conference after the August recess.
Rep. Debbie Dingell (D-Mich.) told The Hill in a phone interview that since a stand-alone measure is unlikely, the customs bill is a good bet for currency provisions with some teeth.
Without tougher rules, there is a risk that a customs bill, another important piece of the president's agenda, will struggle to gain enough support in Congress, Dingell said.
Still, Dingell will wait to see what emerges and “go with the flow ... see what happens in the Senate and then look for opportunities on the House side” to get something done on currency.
Sen. Sherrod BrownSherrod Campbell BrownAdvocates call on top Democrats for 0B in housing investments Democratic senators request probe into Amazon's treatment of pregnant employees Wyden releases new tax proposals as Democrats work on .5T bill MORE (D-Ohio), who opposes the president’s trade agenda, intends to use China’s yuan depreciation to urge the inclusion of countervailing duties in the customs conference report.
“China will stop at nothing to give its exports an unfair advantage — the U.S. should be even more vigilant about protecting American workers and manufacturers,” he said in an email to The Hill.
“China’s actions underscore the urgent need to ensure that final customs enforcement bill gives our government tools to protect American jobs when China cheats trade laws.”
But one of the toughest currency provisions — an amendment by Sen. Charles SchumerChuck SchumerBiden discusses agenda with Schumer, Pelosi ahead of pivotal week CEOs urge Congress to raise debt limit or risk 'avoidable crisis' If .5 trillion 'infrastructure' bill fails, it's bye-bye for an increasingly unpopular Biden MORE (D-N.Y.) that would give the U.S. government more power to impose countervailing duties on nations that depress the value of their currency — isn’t expected to survive a conference.
The White House opposes the amendment.
An aide for Sen. Rob PortmanRobert (Rob) Jones PortmanEmboldened Trump takes aim at GOP foes Overnight On The Money — Presented by Wells Fargo — GOP senator: It's 'foolish' to buy Treasury bonds Senate lawmakers let frustration show with Blinken MORE (R-Ohio) who led a bipartisan charge to get tougher currency policies into the fast-track trade law, said he is talking to other Senate offices about next steps.
Portman “is not surprised that these alarming actions are continuing, which is why he has — and will continue — to fight currency manipulation so aggressively,” the aide said.
The 10-year customs bill, which aims to streamline and improve trade enforcement and facilitation, includes several White House-approved ways to fight currency manipulation, including one that would give the Treasury Department more power to take action against designated currency manipulators.
Also, Rep. Candice Miller (R-Mich.), in an effort to better protect the auto industry, carefully negotiated a currency amendment with Speaker John BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE (R-Ohio) that is expected to remain in the final version of the customs bill, an aide said.
That provision requires the Treasury to monitor and report to Congress on the list of U.S. trading partners engaging in currency manipulation and actions that should be taken.
Overall, congressional efforts have mostly been aimed at using the 12-nation Trans-Pacific Partnership (TPP) as a vehicle for stricter policies to combat the currency issues with the expectation that China will eventually join the massive pact and be subject to tougher exchange rate policies.
China isn’t part of the deal but has expressed on-and-off interest in eventually joining the TPP.
Negotiators during the latest round of talks in Hawaii discussed setting up a side deal that would require finance ministers to meet regularly on the issue.
Meanwhile, the yuan stabilized on Friday after sending shock waves through global markets.
Chinese officials said they were trying to align their currency with market forces after years of pressure by the Treasury Department.
"What we are demanding is a fair and level playing field,” said Rep. David Joyce (R-Ohio) who has worked with Ryan on his measure, in an email to The Hill.
“Let's give our workers and companies a chance to compete fairly in the global economy. That is what we are talking about,” Joyce said.