Getting Tough on China
I joined a bipartisan group of senators to introduce legislation that will crack down on China's currency manipulation. This week, the Senate passed the legislation by a bipartisan margin of 63-35. By confronting China on its currency cheating, we will create jobs in the United States.
China has kept its currency -- the yuan -- artificially low for years to make it easier to export their products to the United States and other parts of the world. The result is a massive and growing U.S. trade deficit with China that is costing our country millions of jobs.
Consider these facts:
- The U.S. trade deficit with China grew from $83 billion in 2001 to $273 billion in 2010, largely because of the undervaluation of the yuan.
- A report from the Economic Policy Institute (EPI) finds that the U.S. trade deficit with China has resulted in the loss of 2.8 million jobs over the past decade (2001-2010), including almost 107,000 jobs in Pennsylvania.
- EPI also found that if the yuan and satellite currencies in the region were revalued to equilibrium levels, we would create up to 2.25 million U.S. jobs.
The Currency Exchange Rate Oversight Reform Act is bipartisan legislation that will trigger actions against China and other countries if they use their currency for unfair competitive advantage. The legislation will impose stiff new penalties, including duties on countries' exports, making it more difficult for China to export its products to the United States.
I believe the legislation can make a big difference and will help put Americans back to work. But the Obama Administration also needs to take on China on currency manipulation. That's why I urged Treasury Secretary Geithner this spring to focus on the Chinese currency issue when meeting with his counterparts at global meetings and pressed the Treasury Department to identify China as a currency manipulator in its semiannual report to Congress.
U.S. unwillingness -- so far -- to crack down on China's currency manipulation is just one piece of a flawed trade policy that has failed our workers and our companies. NAFTA and other NAFTA-style free-trade agreements have cost the U.S. jobs and our state has borne a significant share of these job losses. When NAFTA took effect in January 1994, more than 875,000 Pennsylvanians were employed in manufacturing. Today, Pennsylvania's manufacturing sector employs 575,000 workers -- a loss of more than 300,000 manufacturing jobs. I have fought to ensure that workers who lose their jobs because of global trade get the training they need to build skills and find new jobs. In September, the Senate passed legislation extending many of the improvements made to the Trade Adjustment Assistance program in 2009. These changes expanded access to workers in the service sector and to workers whose jobs were offshored to countries -- such as China -- which do not have trade agreements with the United States. I am pleased that this help for PA workers will now be signed into law.
The hard reality is that our country doesn't have a strategic trade policy. It's an ad hoc approach that hasn't worked. China has taken advantage of our lack of focus and it's clearer than ever that the United States needs a fresh approach to trade policy. People who have seen their jobs offshored and companies who have faced unfair competition from abroad must have a seat at the table. Reshaping U.S. trade policy will take time. But there are actions we can take right now to support our workers and companies by: cracking down on China's currency manipulation; ensuring that workers harmed by international trade get the support and training they need through TAA; and rejecting any free trade agreements that will cost American workers their jobs.
This week, by tackling China's currency manipulation, the Senate has sent China a message that its unfair trade practices will no longer be tolerated while showing the American people that Democrats and Republicans actually can work together to create U.S. jobs.