New York, N.Y., September 22, 2006 – Anticipating a possible Senate vote on controversial legislation that would slap tariffs of 27.5 percent on all imports from China, the United States Council for International Business has joined a broad range of trade groups in urging the Senate to reject the bill.
In a letter delivered to the Senate yesterday, the groups expressed their strong opposition to S. 295, the Schumer-Graham bill, which would impose the tariffs if China refused to adjust its currency’s exchange rate against the U.S. dollar.
“Concerns with the exchange rate between China’s currency and the dollar cannot be resolved through arbitrary tariffs that violate the rules of the World Trade Organization and could destabilize the U.S. and global economies,” the letter stated. “Imposing a massive tax on an estimated $200 billion of American purchases will likely result in similarly significant retaliatory measures being taken against U.S. exports to China, thereby undermining, not enhancing, U.S. competitiveness.”
The legislation would also negatively impact American consumers and drive up production costs for U.S. companies, the letter said.
The groups said Senate passage of the Schumer-Graham bill “would derail the progress that has been made to date on China’s exchange rate policies and on broader financial sector reforms that are the essential element of a long-term solution, as well as the many other issues on which the U.S. government is seeking progress.” They also warned of negative reactions from other trading partners, saying the passage would represent a renunciation by the United States of its obligations under World Trade Organization rules.
USCIB also recently released a comprehensive statement on Chinese trade and investment practices in the context of its membership in the World Trade Organization, saying China and the United States have made progress toward resolving many key sources of bilateral commercial friction, but that China needs to work toward fully meeting its responsibilities under the WTO.
USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment. Its membership includes some 300 U.S. companies, professional service firms and associations whose combined annual revenues exceed $3 trillion. As American affiliate of the leading international business and employers organizations, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade.