Administration Must Adopt New China Trade Strategy

Mar 27, 2008
Press Release

WASHINGTON, DC Ways and Means Committee Chairman Charles B. Rangel (D-NY) and Trade Subcommittee Chairman Sander M. Levin (D-MI) joined fellow Committee members on a letter urging President Bush to adopt and implement a new strategy for dealing with China’s persistent currency manipulation and other trade issues.

In their letter, the members note the adverse impact currency manipulation is having on the U.S.-China trade relationship, specifically on the U.S. trade deficit, retention of American jobs and suppression of U.S. economic growth.  To address these problems, the members urge the Administration to “use all available tools at its disposal to address China’s protracted, large-scale intervention in the foreign exchange markets to maintain an undervalued currency.” 

The letter also notes the impact of China’s currency manipulation on the world economy.  The alarming growth in China’s global trade surplus and its staggering foreign exchange reserves demonstrates the depth of the problem and adds further urgency to a new trade policy vis-à-vis China.  The attached text calls on the Bush Administration to break from their failed approach of “quiet diplomacy” and implement a new strategy to engage China in the international community.

The new strategy incorporates the following components:

1.      Strengthen U.S. leadership in the International Monetary Fund (IMF)
2.      Take action in the World Trade Organization (WTO)
3.      Initiate special negotiations with key countries
4.      Enforce existing U.S. trade and exchange rate laws

In closing the letter to President Bush, the members note the United States’ role in developing the international economic rules that govern existing bodies such as the IMF and WTO.  The members impress upon the Administration the need for the U.S. to continue to play a leadership role, stating “The United States has the opportunity to lead the community of nations in ensuring compliance with those vital rules.  The Executive branch is in the best position to provide this leadership and has the tools it needs to do so.”

The communication does not rule out the possibility of legislative action by Congress, stating “If the Administration is unable or unwilling to do so, Congress will take action, if necessary, to ensure the integrity of the international economic system and to guard against international economic instability.”

Please click here to view a PDF of the letter with signatures: