... before they start another 'great depression' ...
(snip)"The measure would apply "to any trading partner with (an) out-of-whack currency," Grassley said. And because many of the bill's punitive measures don't kick in for six months or a year, "It's a velvet glove with a steel fist inside," he added.
The vote comes before Treasury Secretary Henry Paulson travels to Beijing next week to discuss the currency dispute and other economic issues, such as product safety.
The Treasury Department issued a statement saying it recognizes Congress wants to send a strong message but it believes "direct, robust discussions with the senior Chinese leaders, not legislation, is the best means of achieving progress."
Sen. Maria Cantwell, D-Wash., was the lone committee member to vote against the bill, which she said could spark retaliation by China, resulting in "unintended consequences" for U.S. companies and consumers. She wants the U.S. to press China to make legal reforms and improve its intellectual property protection, a key issue for Microsoft Corp., located in Redmond, Wash.
Several bills were introduced this year aimed at punishing China and other alleged currency manipulators. Business groups representing manufacturers such as General Motors Corp., Honeywell International Inc. and General Electric Co. say anti-trade sentiment in Congress is strong enough to override a likely presidential veto of a currency bill.
The measure approved Thursday does not specifically mention China and is not as punitive a bill as the proposal before the Senate last year that would have imposed an across-the-board tariff on Chinese imports.
Baucus and Grassley introduced their bill last month, after the Treasury Department refused to cite China as a currency manipulator in a semiannual report to Congress.
U.S. manufacturers and many members of Congress say that China keeps its currency, the yuan, undervalued by as much as 40 percent against the U.S. dollar to gain an unfair trade advantage. The cheaper currency means that China's exports to the United States are less expensive.
Sen. Charles Schumer, D-N.Y., who sponsored legislation last year with Sen. Lindsey Graham, R-S.C., that would have slapped a 27.5 percent tariff on Chinese goods, helped develop the Baucus-Grassley proposal.
"Our objective this year should be to pass the strongest possible bill we can with the largest possible vote that we can," Schumer said."(snip)



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