March 31, 2006 – Despite continued hemorrhaging of U.S. manufacturing jobs and an astronomical trade deficit, Senators Charles Schumer (D-NY) and Lindsey Graham(R-SC) again postponed a vote on legislation to punish China for its ongoing currency manipulation.
The decision by Schumer and Graham comes on the heels of a week-long trip to China with Sen. Tom Coburn (R-OK), where Chinese officials assured them they would let the value of their currency strengthen. China, which has undervalued the yuan by up to 40 percent over the last decade, continues to hold the value of the yuan artificially low after a mere 2 percent revaluation in July.
The Schumer-Graham legislation threatens a 27.5 percent tariff on Chinese imports if the government doesn’t move to further strengthen their currency. Over the last two years, the U.S. has witnessed the continued loss of manufacturing jobs and a record $201.6 billion deficit in 2005. The U.S. trade deficit with China has shown no sign of slowing down, jumping 10 percent to a record $17.9 billion in January.