WASHINGTON — A bipartisan group of senators from states hit especially hard by the economy on Wednesday hailed Senate passage of a bill that would impose trade sanctions on China if Beijing doesn't stop propping up the yuan.
Republican Sens. Lindsey Graham of South Carolina and Jeff Sessions of Alabama and Democratic Sen. Charles Schumer of New York urged the House of Representatives to follow the Senate’s lead, which passed the China trade legislation late Tuesday by a 63-35 vote. Sixteen GOP senators joined 47 Democrats in support.
"China has a callous disregard for the rule of law," Graham told reporters on Capitol Hill. "They cheat at every turn. They steal intellectual property, they counterfeit goods, affecting our defense industries, and they manipulate their currency."
The Senate measure would authorize the federal government to take escalating steps, among them the imposition of tariffs of Chinese imports, if Beijing continues to value its currency as much as 40 percent below what it would be worth on world markets.
"Last night, the Senate acknowledged what too many Ohio workers and Ohio manufacturers already know — that we are, in fact, in a trade war and the Chinese have done very well, thank you," said Sen. Sherrod Brown, a Democrat who crafted the bill.
"Last night we took steps to fight back," Brown said.
Although 221 House representatives, including 61 Republicans, have cosponsored similar legislation, Speaker John Boehner warned Tuesday that its implementation could prompt China to take retaliatory measures that would harm the U.S. economy.
"Given the volatility in the world markets, given the uncertainty about the world economy, for the Congress of the United States to be taking this step at this moment in time poses a very severe risk of a trade war," Boehner said.
House Minority Leader Nancy Pelosi of California rejected Boehner's concerns.
Pelosi said China's currency manipulation costs 1 million American jobs because Chinese products are underpriced competing against U.S. goods both in the United States and foreign countries.
"The speaker says we are going to start a trade war," Pelosi said. "The Chinese government started a war with America's manufacturing sector a long time ago. They have undervalued their currency, as I've said. They violate our intellectual property rights. They've subsidized targeted industries. They've dumped their products in our country. This is a one-way street to the disadvantage of American workers."
In Beijing, Chinese government officials criticized Senate passage of the currency measure.
"This bill seriously violates World Trade Organization rules, harms bilateral economic and trade cooperation, and does not solve the economic and employment problems in the United States," said Chinese Foreign Ministry spokesman Liu Weimin.
Graham called on President Barack Obama to speak out on behalf of the measure, noting that he backed such tough steps while running for the White House in 2008.
Graham said he and other leading supporters of the bill are willing to work with Obama to improve it.
White House press secretary Jay Carney said Obama aides were working with lawmakers to determine whether the measure violates U.S. obligations under various trade treaties.
"We share the goal of the legislation in taking action to ensure that our workers and companies have a more level playing field with China," Carney said.
The Chamber of Commerce and some other business groups oppose the bill, saying it would harm American companies that sell goods in China.
U.S. firms exported almost $92 billion in products to China last year, an increase of almost one-third from 2009. China sold $365 billion of goods in the United States, producing a 2010 trade deficit of $273 billion.
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