Immediate Action Needed to Reduce Trade Deficit with China

by James Parks, Feb 14, 2008

The record $256 billion trade deficit with China announced today by the U.S. Department of Commerce “drives home the fact that our nation’s trade policies are failing working families,” AFL-CIO President John Sweeney says.

Our government must take immediate and effective actions to ensure that the Chinese government plays by the rules—with respect to currency, illegal subsidies, tax policies and workers’ rights. We know the Bush administration won’t act, so Congress must step in.

Click here to read President Sweeney’s entire statement. 

Meanwhile, a bipartisan group of members of Congress today renewed their call for passage of the Currency Reform for Fair Trade Act (H.R. 2492). The bill, co-authored by Reps. Tim Ryan (D- Ohio) and Duncan Hunter (R-Calif.), declares currency manipulation an illegal trade subsidy and provides American manufacturers the opportunity to seek relief against countries that artificially regulate their currency, including China. 

The AFL-CIO, U.S. manufacturers and many economic experts maintain that China deliberately undervalues its currency, the yuan, to keep the value artificially low so it can boost exports and discourage imports—running up the U.S. trade deficit and costing good American jobs. An AFL-CIO report shows China’s fixed currency rate artificially lowers the price of its goods by 40 percent, effectively subsidizing China’s exports and putting U.S. companies at a competitive disadvantage. 

The trade deficit with China, which represents more than 50 percent of the deficit in manufactured goods, also is directly linked to the loss of millions of U.S. manufacturing jobs since 2001. 

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