Schumer And Graham Back Off China Tariff Bill Again

by Glen Shapiro, LawAndTax-News.com, New York

30 March 2006

Two US Senators have again been persuaded into a climbdown with regard to the Chinese government's policy of keeping the yuan weak against the US dollar.

China has been widely criticized by its trade partners for its inflexible currency policy, and although Beijing has promised to make changes, and has slowly begun to do so, no timetable has been laid out for this.

Legislation put forward for the second time by Senators Charles Schumer (D-New York) and Lindsey Graham (R-South Carolina) would have imposed a 27.5% import tariff on Chinese goods to compensate US firms for the Chinese exchange rate policy, which puts them at a disadvantage.

However, according to US media reports, following a visit to China earlier this month, the two politicians announced that they would not push for their bill to be voted on this Friday by the Senate, as progress was being made by the Chinese government, and such action would merely disrupt this.

Senators Schumer and Graham were persuaded by Treasury Secretary John Snow and then Federal Reserve Chairman Alan Greenspan to backtrack on the same issue in July of last year.

Commenting at the time, Mr Snow observed that:

"It is important that China move to a more flexible exchange rate regime. We have urged them to do so, and they have agreed that it is in their interest to adopt greater exchange rate flexibility."

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