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senate Bill S. 433

Currency Wars: Should Countries that Undervalue Their Currency (Like China) Face Investigation?

Argument in favor

Currency undervaluation hurts the American economy — especially manufacturers — and has resulted in millions of job losses. As a result the U.S. needs to do what it can to protect workers from foreign countries that engage in such unfair practices.

Carmine's Opinion
···
08/25/2015
YES. And we are one of these countries. AUDIT THE FED.
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Aidan-WC's Opinion
···
06/11/2016
China is simply the main aspect of our BROKEN economy. Even though they are promoting industrialization for these hedge fund, corporation CEO'S they are not only devaluing our economy , they are devaluing our corrupt capitalist system and they are devaluing our citizens. These corporations and hedge fund CEOS are unthinkably making a plethora of profit every minute and leaving the American people to pay off the 22% owed national debt to foreign nations incorporating China. The nation of China is simply manipulating our nation by utilizing us as leverage to BOOM THEIR ECONOMY AND SIT BACK ON THEIR COSI CHAIRS AND LAUGH WHILE THEY READ ABOUT OUR OUR ECONOMY CRUMBLING. I am not blaming the nation of China, I greatly respect China's values and not necessarily their political ideology. I have most of the Blame on our nations advanced entrepreneurs and finical companies that make their fortune on China's regulation of export/import trade. We can't make an excuse that during the time period of the American Revolution trade was completely fine by the British actions. No! American colonist were extremely manipulated and were sometimes exterminated for exercising their opinion on the taxation system, such as the Boston massacre as well. The American revolution system relates to the current trade relationship we have with China because let's say China is the king/British/RED COATS and the CEO'S of America are loyalists making extremely great profit to positively influence their economic status while they watch the colonist suffer trying to pay off this debt. The point being is we have to exercise our first amendment rights to inform our entrepreneurs are considerate of how the trade/manufacturing with China would influence the American people before they think about this- "HEY I AM MAKING THE MONEY, NO ONE ELSE SO I DONT CARE, MY BANK ACCOUNT WILL BOOM!" This statement is relevant to the current economic fiasco we are in with China especially. Furthermore, when Mr. Donald trump Jr. Is elected in office his administration is going to have to utilize its advanced entrepreneurship knowledge to alleviate our current foreign debt with China and gradually increase AMERICAN MADE PROCTS TO BENEFIT ALL CITIZENS, NOT NECESSARILY THE TOP CEO'S AND HEDGE FUND! Together in these next four years we are going to have to regulate procedures to alleviate this particular matter and once again travel back to the NEW DEAL AGE DURING FRANKLIN DELANO ROOSEVELT'S TIME, WHEN OUR ECONOMY BOOMED. America is the greatest nation on the face of the earth that can achieve any economic accomplishment as long as they set their mind to it. Thank you for your time
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JayinNC's Opinion
···
08/25/2015
The attitude that it's ok for a country to manipulate its currency to If nothing else but to steal jobs at the very least (China) has been doing this for decades.. And of course the U.S. Does nothing. How many U.S. Senators and Congressmen have gotten fat contributions from companies doing business in China???
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Argument opposed

If another country wants to devalue their currency, that just means American consumers will save money on that country’s exports. When American consumers save money, their spending goes elsewhere in the economy to support businesses and jobs.

operaman's Opinion
···
08/25/2015
The U.S. has devalued its currency for years. Borrowing money from the air. Trillion dollars in debt. Yes, China wasn't fair but Big Brother has devalued the U.S. Dollar since we went off the gold standard. A little inflation stimulates the economy, but rising prices have led us into 2015. Even with inflation our savings account made more that 0.25%. Back in the 80' locked in a 10% rate until I was 65 yo.
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Elinor's Opinion
···
08/24/2015
If our "leaders" in D.C. would give U.S. manufacturers tax breaks, U.S. citizens would be more inclined to purchase U.S.-made products. If our "leaders" in D.C. would give U.S. CITIZEN consumers tax breaks, and STOP giving our money to other countries' citizens, we would have more money to purchase U.S.-made products. Hmmm. What a novel idea. Why has nobody in D.C. thought of this?
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Randall's Opinion
···
08/24/2015
It won't work. Sounds good, but the math doesn't pencil.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedFebruary 10th, 2015

What is Senate Bill S. 433?

This bill would require federal entities that manage trade laws to investigate currency undervaluations by foreign countries. These "countervailing duty" investigations would offer countervailable subsidies to a country's exporters or products at the request of an interested party. Countervailable subsidies are offered to countries whose products are hurt by unfair trade practices — and in this case, could lead to a duty being imposed on products imported from the country with the devalued currency.

Currency devaluation makes a country’s exports more competitive globally when compared to exports from countries with stronger currencies. Fears of a currency war among China, Vietnam, and other Asian countries have grown as those nations seek to boost the export-reliant manufacturing sectors of their economies. Announcements from central banks in China and Vietnam that they would devalue their currency fueled a contraction in the global financial markets in August 2015.

For the purposes of this bill, the fact that the subsidy caused by an undervalued currency is also provided to non-exporters in that foreign country would not preclude a countervailing duty and anti-dumping duty investigation from proceeding.

Impact

American businesses, their employees, and consumers; companies importing goods from countries being investigated for currency undervaluation, countries that undervalue their currency, the Dept. of Commerce, and the U.S. International Trade Commission.

Cost of Senate Bill S. 433

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Sen. Jeff Sessions (R-AL) believes the U.S. has a duty to defend American workers from unfair overseas competition:
“When one of our trading partners harms American workers by skirting the rules, we have an obligation to respond in their defense.”

The AFL-CIO has claimed that currency undervaluation has cost up to 5 million American jobs in its support for this legislation, and the Alliance for American Manufacturing noted that the trade deficit with China cost 3.2 million U.S. jobs between 2001 and 2013.

However, there has been opposition to this method of addressing currency manipulation by foreign governments, as the White House wants to deal with the issue through diplomacy in order to preserve pending trade agreements. Treasury Secretary Jack Lew has questioned the effectiveness of a legislative fix to dealing with foreign currency devaluation:
“We remain concerned that an enforceable provision on currency could have a negative impact on our ability to protect American workers and firms and set back our international efforts."
Currently, this bill has 12 cosponsors in the Senate, including eight Democrats and four Republicans. But the opposition to the proposal is also bipartisan in nature, as Rep. Paul Ryan (R-WI) has joined the White House in opposing legislation of this variety:
“With all damage such an approach would do to the United States and our standing in the world, it provides no real incentive for bad actors to change behavior.”


Of Note
: In general, there are two types of exchange rates that countries can use to control their currency — fixed and floating.
Fixed exchange rates are pegged to a foreign government’s currency, and while they lack flexibility for the government doing the pegging, they are predictable. Floating exchange rates are determined by global currency markets through supply and demand relative to other currencies, and a country’s central bank can intervene to manipulate the currency.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user epSos .de)

AKA

Currency Undervaluation Investigation Act

Official Title

A bill to establish a benefit calculation methodology with respect to currency undervaluation for purposes of countervailing duty investigations and reviews, and for other purposes.

    YES. And we are one of these countries. AUDIT THE FED.
    Like (12)
    Follow
    Share
    The U.S. has devalued its currency for years. Borrowing money from the air. Trillion dollars in debt. Yes, China wasn't fair but Big Brother has devalued the U.S. Dollar since we went off the gold standard. A little inflation stimulates the economy, but rising prices have led us into 2015. Even with inflation our savings account made more that 0.25%. Back in the 80' locked in a 10% rate until I was 65 yo.
    Like (11)
    Follow
    Share
    If our "leaders" in D.C. would give U.S. manufacturers tax breaks, U.S. citizens would be more inclined to purchase U.S.-made products. If our "leaders" in D.C. would give U.S. CITIZEN consumers tax breaks, and STOP giving our money to other countries' citizens, we would have more money to purchase U.S.-made products. Hmmm. What a novel idea. Why has nobody in D.C. thought of this?
    Like (4)
    Follow
    Share
    China is simply the main aspect of our BROKEN economy. Even though they are promoting industrialization for these hedge fund, corporation CEO'S they are not only devaluing our economy , they are devaluing our corrupt capitalist system and they are devaluing our citizens. These corporations and hedge fund CEOS are unthinkably making a plethora of profit every minute and leaving the American people to pay off the 22% owed national debt to foreign nations incorporating China. The nation of China is simply manipulating our nation by utilizing us as leverage to BOOM THEIR ECONOMY AND SIT BACK ON THEIR COSI CHAIRS AND LAUGH WHILE THEY READ ABOUT OUR OUR ECONOMY CRUMBLING. I am not blaming the nation of China, I greatly respect China's values and not necessarily their political ideology. I have most of the Blame on our nations advanced entrepreneurs and finical companies that make their fortune on China's regulation of export/import trade. We can't make an excuse that during the time period of the American Revolution trade was completely fine by the British actions. No! American colonist were extremely manipulated and were sometimes exterminated for exercising their opinion on the taxation system, such as the Boston massacre as well. The American revolution system relates to the current trade relationship we have with China because let's say China is the king/British/RED COATS and the CEO'S of America are loyalists making extremely great profit to positively influence their economic status while they watch the colonist suffer trying to pay off this debt. The point being is we have to exercise our first amendment rights to inform our entrepreneurs are considerate of how the trade/manufacturing with China would influence the American people before they think about this- "HEY I AM MAKING THE MONEY, NO ONE ELSE SO I DONT CARE, MY BANK ACCOUNT WILL BOOM!" This statement is relevant to the current economic fiasco we are in with China especially. Furthermore, when Mr. Donald trump Jr. Is elected in office his administration is going to have to utilize its advanced entrepreneurship knowledge to alleviate our current foreign debt with China and gradually increase AMERICAN MADE PROCTS TO BENEFIT ALL CITIZENS, NOT NECESSARILY THE TOP CEO'S AND HEDGE FUND! Together in these next four years we are going to have to regulate procedures to alleviate this particular matter and once again travel back to the NEW DEAL AGE DURING FRANKLIN DELANO ROOSEVELT'S TIME, WHEN OUR ECONOMY BOOMED. America is the greatest nation on the face of the earth that can achieve any economic accomplishment as long as they set their mind to it. Thank you for your time
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    It won't work. Sounds good, but the math doesn't pencil.
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    What can the U.S. do to discourage this practice? Nothing. We cannot dictate economic policy to other countries.
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    And just how would you do this? It's their business how they run their country, not ours. I guess we could do what the GOP would do. Bomb the hell out of them.
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    it's their business what they do in their country like Jesus can this country mind its own business for five minutes
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    Not only that but this type of warfare needs to be recognised and put on the same level as conventional warfare, just like what should be done with cyberwarfare
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    What business is it of ours to interfere in the internal economic affairs of other nations? The U.S. is not the world's moral arbiter! If we create an internally strong economy--as Bernie Sanders & Elizabeth Warren suggest--this should not be a crucial issue even with international economic interdependence.
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    who is going to investigate their must be a better way but it is a problem
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    It would be hypocritical for us to do so. Isn't that what we've been doing with quantitative easing for the last five years?
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    There are other ways for our country to balance currency actions by other countries. A recent IMF report talked about the importance of global value chains in the world economy. A country that devalues its currency excessively has to be able to produce finished products from almost entirely domestically produced raw materials, or it won't be able to keep its balance of payments reasonable. If a country is devaluing its currency, it could be the result and/or cause of structural weaknesses in that country. Rather than trying to legislate the problem out of existence, we should let the global market self-correct. Unless it becomes a national security issue, congress really has no reason to legislate.
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    We have no authority over other countries currency, and if they want to cheapen their exports we can save money anyways.
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    It's good business sense for America to investigate others countries trade practices, especially if they might be being deceptive. This isn't "getting in other country's business" it's protecting our own.
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    If you devalue your currency the U.S. government should respond by applying tariffs to your goods and services.
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    Investigate them if they have American company branches within their jurisdiction. If they devalue their currency they are hurting the American economy. Furthermore, to avoid this issue, bring American jobs back on American soil, so American citizens can have job. Not foreign assets.
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    Free trade only works when it is truly free from the crass cheating nations such as China engage in order to obtain unfair advantages. It's time to cut China and other offenders down to size in the global market.
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    The attitude that it's ok for a country to manipulate its currency to If nothing else but to steal jobs at the very least (China) has been doing this for decades.. And of course the U.S. Does nothing. How many U.S. Senators and Congressmen have gotten fat contributions from companies doing business in China???
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    Go get the bastards
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