Senator Charles Schumer has put President Obama on notice that his trade agenda will be in jeopardy if the president does not do something about what Schumer asserts is the Chinese manipulation of their currency. And this is coming from a fellow Democrat.
The senior senator from New York claims that America has lost more than 3 million jobs because of how the Chinese government deliberately keeps its currency, the Yuan, low in value. Countries like China prefer a devalued currency because it makes both investment in them and their exports more attractive to foreigners who bring hard currencies like the Dollar and the Euro with them.
But China’s policies have led to a huge trade imbalance for the United States. This is because Chinese produced goods are much cheaper then what they would cost if produced in America and American products are too expensive for Chinese markets.
The Dollar is currently worth 6.21 Chinese Yuan. Way down from the well over ten to the Dollar that the exchange rate was set at just a few years ago, but nowhere near where American economists say is the Chinese currency’s real value.
Many members of Congress from both parties have been disappointed in what they see as a failure on the part of both the Obama and the Bush Administrations to do something about the situation. This is why even Democrats re now pushing a bill which would let the Congress take such action without needing an OK from the White House.
Even more drastic is the threat of blocking President Obama’s coveted free trade policies.
Senator Schumer told The Huffington Post, “What we’ve got now is a tough currency bill that doesn’t require the OK of the administration because both the Bush administration and this administration have refused in this instance to protect the American workers by citing China for currency manipulation, even though everyone knows they’re doing it.”
The main problem with the plan is that many, on both sides of the aisle, are sure to see the proposed new law as an unconstitutional power grab by the Congress at the expense of the executive branch of government.