Economy

US House of Representatives passes bill on foreign currency

(Xinhua)
Updated: 2010-09-30 09:43

WASHINGTON - The US House of Representatives on Wednesday passed the proposed Currency Reform for Fair Trade Act, to allow the United States to seek trade sanctions against its trade partners for allegedly manipulating their currency, a new move of the nation's rising trade protectionism.

The House of Representatives Ways and Means Committee passed the bill last Friday, clearing the way for the full House to take up the measure on Wednesday.

The 348-79 vote sends the measure to the Senate. The bill must gain Senate approval and be signed into law by President Barack Obama. Analysts hold that the bill, which is reportedly targeting China's currency, may never become law, as it faces an uncertain future in the Senate.

With November's midterm elections approaching and mounting pressure from recession-weary voters, US lawmakers were weighing bills that would slap sanctions on Chinese goods.

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However, some US congressmen said on Wednesday in the general debate before the House voting that passing the bill could do nothing to solve the US trade imbalance.

Representative Jeb Hensarling contended that the United States was still mired in a slow economic recovery, while passing the bill would not create more jobs for the nation but could trigger a trade war, adding that this was an "unwise policy."

Representative Kevin Brady pointed out that passing this bill could not help the United States to achieve its goal, but would "do more harm than good."

China on Tuesday urged US lawmakers to recognize the importance of Sino-US trade and economic ties and to avoid protectionist measures against China.

Safeguarding healthy and stable development of the Sino-US trade and economic ties was in the common interest of both countries, said Chinese Foreign Ministry spokeswoman Jiang Yu.

China's central bank announced on Wednesday prior to the US House vote that China would further improve the formation mechanism of the yuan exchange rate to increase its flexibility.