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Congress to Vote on China Currency Bill

October 10, 2011
Anger over the loss of U.S. jobs, fear that America's global economic dominance is sliding, and bitter presidential politics have created a toxic backdrop for U.S. lawmakers this week as they vote on a currency bill aimed at penalizing China. The decisions in Congress will prove an important litmus test for United States' willingness to embrace trade-opening measures in the face of high unemployment and a stalling economic recovery. The China currency bill, due for a vote in the U.S. Senate on Tuesday, would require the Obama administration to levy tariffs on China and four other Asian countries for depressing the value of their currencies in an effort to boost their exports. For some U.S. lawmakers facing reelection in 13 months, delivering a trade bill that penalizes China for using its yuan currency to gain export share would arm them with an answer to voters questioning how they are addressing the highest U.S. unemployment in a quarter of century. The unemployment rate remains stuck at 9.1% for a third straight month. Trade data due to be released on Thursday could sharpen the debate even further. The U.S. trade deficit is forecast to have worsened to $46bn in August from $44.81bn. China also reports trade data for September. Its exports are forecast to have risen a robust 20% from a year earlier, though down from August's 24.5% growth. House Republicans and Democrats have signed onto a similar bill, and they have sufficient support to override U.S. House Speaker John Boehner and bring it to a vote. Boehner like the White House has warned that the bill is "pretty dangerous" and could lead to a trade war with China. [CNBC, 10/10/11]