March 29, 2006
Two U.S. senators said yesterday they would delay for six months a vote on a bill punishing China for restricting its exchange rate, saying they had seen signs of currency reform during a recent trip to China.
The bill, sponsored by Sens. Lindsey Graham, South Carolina Republican, and Charles E. Schumer, New York Democrat, has drawn strong support from both parties in Congress, where frustration is growing with Chinese policies that lawmakers say hurt American workers and the economy.
The bill would impose 27.5 percent tariffs on Chinese imports if the currency dispute is not settled. The lawmakers said they would delay a vote to no later than Sept. 29. If the pace of China's currency reform slowed before then, they said, they would call for a vote.
During a press conference, Mr. Graham said he hoped that Chinese President Hu Jintao would announce further currency reforms during his visit to Washington next month. He warned that "the jury is still out" and promised to call a vote on his bill if reform was not pursued.
Mr. Schumer said the "Chinese see the fact that manipulating their currency cannot continue."
"We believe that if we hadn't introduced this strong medicine, nothing ever would have happened," he said. "Now that we're on the path to progress, we don't have to fire this so-called 'nuclear weapon,' but can hold it in abeyance, as we carefully watch and wait and expect continued progress."
U.S. lawmakers want China to take steps to allow the yuan to strengthen against the dollar, saying the currency is undervalued by up to 40 percent.
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