WASHINGTON – Two senators who are sponsoring legislation that could impose stiff sanctions on Chinese imports said Wednesday they plan to bring their measure up for a vote by Sept. 30 unless China goes further to overhaul its currency system.
During his confirmation hearing, Paulson assured lawmakers he would continue administration efforts to pressure China to allow its currency, the yuan, to rise in value against the dollar.
American manufacturers contend that China's currency is undervalued by as much as 40 percent, giving China a huge competitive advantage over American goods. The U.S. trade deficit with China hit an all-time high of $202 billion last year and is on track to go higher this year.
Schumer said Paulson told them he would work to get China to go farther in revaluing its currency. The two senators told Paulson they plan to move their legislation by Sept. 30 unless they saw concrete results.
"This is not a question of friendship or faith. This is a question of getting something done," Schumer said.
Schumer and Graham visited China earlier this year and expressed optimism after talks with Chinese authorities that the currency would soon rise in value against the dollar.
China did announce a year ago that it was revaluing its currency by 2.1 percent, but since that time the yuan's value against the dollar has risen by slightly more than 1.5 percent, far below what critics say is needed to cut into the U.S.-China deficit.
"We are deeply disappointed that there has been no movement since our visit to China," Schumer said.
The legislation the two men are sponsoring would impose 27.5 percent across-the-board tariffs on all Chinese imports if the two countries could not resolve the issue after a 180-day negotiating period.
The legislation gained 67 votes on a procedural question last year and Schumer and Graham said they believed the proposal would garner even more support if it comes up for a vote.
The administration has opposed the bill, saying it would erect protectionist barriers that would raise the price of Chinese goods for American consumers.