US House passes yuan legislation
The US House of Representatives has passed a bill, which will allow it to impose retaliatory tariffs on China.
The bill passed 348 to 79 and included the support of 99 Republicans. However, to become law, the bill would also need to be passed by the Senate and then signed by President Barack Obama.
However, it has not received full approval from the US and has been opposed by the American Chamber of Commerce, who said in an email: “if enacted into law, the chamber does not believe the bill will be effective in achieving its objectives and would fail to create significant US job growth.”
The bill comes after the US continues to express dissatisfaction that China is keeping the value of the yuan low to help its exporters at the expense of overseas competitors.
Trade groups have argued that the yuan, also referred to as the renminbi, is kept up to 40% below what its value should be against the US dollar.
In June, Beijing loosened its currency peg and, while the move was welcomed, the US said the yuan had appreciated around 2% against the dollar since that time.
Many have already referred to China as a currency manipulator.
However, China has previously said keeping the yuan stable is “an important contribution” to global recovery and if the yuan appreciates by 20% to 40%, China is concerned that many companies will go bankrupt.
However, the US argues that the weak yuan is responsible for driving US manufacturers out of business and the loss of thousands of US jobs.
The bill, though, has angered Beijing, who has said the bill contravened World Trade Organisation (WTO) rules.