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Dave Johnson

Today the US Trade Representative (USTR) Ron Kirk filed two complaints with the World Trade Organization (WTO). The first alleges that China is keeping American credit and debit card companies out of their electronic payment market. The second is a “dumping” (selling under cost) complaint on steel products.

“We are concerned that China is breaking its trade commitments to the United States and other WTO partners,” Kirk said in announcing the two cases.

This is a big deal, because it tells China that we are willing to fight back. But Sen. Charles Grassley said this was not enough,

“The administration should go one step further and bring a case against China’s unfair currency manipulation at the WTO. Everyone knows China is manipulating its currency to gain an unfair advantage in international trade,” Grassley said.

Almost exactly a year ago I wrote a post, President Obama Enforces Trade Law In China Tire Case!, celebrating President Obama’s decision to enforce the ITC’s recommendation to impose tariffs on Chinese tire imports.

What was the result of that decision to actually enforce trade laws? Did the world end? Did it start a “trade war” with China? No, the result was that jobs started to return.

The Alliance for American Manufacturing is running this full page ad in a few newspapers today:


(Click for large pdf)

AAM explains: (click through for links)

Why did we do it? To make sure lawmakers understand just what is at stake today.

First, Treasury Secretary will be appearing at not one but two hearings today to examine China’s currency policies. We suspect he’ll get grilled by lawmakers for not doing more.

Second, the International Trade Commission is examining today a trade case filed by several domestic paper companies and the United Steelworkers on coated paper from China and Indonesia. Here’s the witness list. We want to remind folks that trade enforcement works.

Finally, some in Congress want the Obama Administration to remove tariffs imposed last year some imported Chinese tires that were causing market disruptions in the U.S. The Alliance for American Manufacturing has already set the record straight on this issue. It’s important to counter these false claims.

The BIG issue, of course, is China’s currency manipulation. Congress is holding hearings on this and Treasury Secretary Geithner testified this morning that the administration is reluctant to formally declare that China is doing what it is doing. A WSJ report puts it this way:

While the Treasury secretary feels the yuan is “significantly undervalued,” a formal designation would “not be a particularly effective tool” for achieving U.S. goals.

Congress needs to act because the administration won’t. Pushing this is in China’s best interests as well. Entrenched and powerful interests on both sides of this dispute are keeping their governments from acting in the broader interest. This is causing a huge bubble of imbalance to expend, threatening the world’s economy. Passing a bill mandating tariffs to force China to bring its currency to market levels is the way around the standoff for both countries.

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