Who's the fool that said politics has no relevance to investing??
Thursday June 9, 2:46 PM
Bush expects China to act on currency as Congress steps up pressure.
President George W. Bush said he expected China to implement currency reforms, as support increased in the US Congress for legislation to force Beijing to revalue its yuan or face higher tariffs on Chinese imports.
"I mean, we're getting indications out of the government, for example, that they understand they've got to do something with their currency," Bush told FOX News. "Time will tell."
Meanwhile, a bill to impose a 27.5 percent tariff across the board on Chinese imports if Beijing does not revalue its yuan currency within six months is "gaining support" among lawmakers, said New York Democrat Senator Charles Schumer, who is spearheading the legislation.
"I can tell you that political support for our bill is very large," Schumer said at forum of the Council on Foreign Relations in Washington.
He urged Bush to convene a "summit" on China trade immediately with key administration officials and Congress. The meeting "should figure out where to go next," he said.
Co-author of the controversial bill is Lindsey Graham, a South Carolina Senator from Bush's Republican party.
The bill however is seen as violating World Trade Organization (WTO) rules because it would retaliate against China without authorization from the global trade watchdog.
Yet, it surprisingly won two-thirds support in the Senate in a procedural vote in April, prompting Republican leaders to promise a vote on the bill by the end of next month.
China has been under increasing pressure, particularly from US policy makers, to revalue the yuan, tightly pegged at 8.28 to the US dollar since 1994.
Many US legislators claim the Chinese currency regime is driving American workers out of their jobs on the back of rising imports from China which had widened the US trade deficit with the Asian giant to 160 billion dollars.
With Congress breathing down its neck, the Bush administration has turned up the heat on China over currency reforms. The Treasury Department, for example, appointed last month a special envoy to China.
Schumer said his bill was also gaining ground in the House of Representatives.
Representative Bill Thomas, chairman of the House Ways and Means Committee, said on Tuesday that the House leadership could sponsor legislation aimed at pressing China to obey trade laws if the move would help win passage of the Central American Free Trade Agreement (Cafta).
"It's difficult to vote on any trade agreement without getting any movement on China," Thomas said in a speech to the United States Chamber of Commerce.
"People look at (China) as a fundamental problem," the Republican Representative from California said. That means lawmakers "have to deal with it" in order to move forward on other trade issues, he said.
The US signed the Cafta last year but Congress must ratify the treaty for it to take effect. Republican leaders are struggling to round up votes because many lawmakers from states with textile or sugar industries have indicated they would join Democrats in opposing the accord.
"What Bill Thomas said yesterday was an amazing shot in the arm for our bill, where he basically said that he would open to the House doing something on the China currency situation," Schumer said Wednesday.
"As our bill move through the Senate -- and we have been promised the vote before the August recess -- and the House decides to deal with it, it is my strong view that we will get real progress," he said.
Schumer and Graham said in a opinion piece in the New York Times published Wednesday that "the time had come for actions, not more words."
They said their ultimate goal was not higher tariffs against Chinese imports into the United States but to prod the Chinese to take concrete steps to allow the yuan to float freely.
Under the bill, the Chinese would not have to float their currency immediately, but they should take immediate and concrete steps towards that goal.
Rogue
