Copyright ©2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

LYNN NEARY, HOST:

We move, now, to the U.S. Senate, where there is a make or break vote today. It's on a bill that could slap punitive tariffs on imports from China, one of this country's largest trading partners. The legislation has strong backing from both Democrats and Republicans in the Senate. They say it could boost American jobs by punishing China's efforts to keep its currency undervalued and its exports under priced. But opponents warn that should the bill become law, it could trigger a devastating trade war.

NPR's David Welna has this report.

DAVID WELNA, BYLINE: The debate on trade sanctions for China that's roiled the Senate all week comes to a head today. Earlier this week, 79 senators voted to take up the bill. Majority leader Harry Reid, yesterday, predicted its passage could help sustain more than a million and a half American jobs by making U.S. goods more competitive with Chinese goods that would end up costing more.

SENATOR HARRY REID: The bill before the Senate would even the odds for American workers and manufacturers in the global marketplace by stopping unfair currency manipulation by the Chinese government.

FRED BERGSTEN: There's no doubt, China cheats on its most fundamental international obligations.

WELNA: That's trade expert Fred Bergsten. He directs the non-partisan Peterson Institute for International Economics here in Washington. Bergsten says China spends one to two billion dollars a day to keep its currency undervalued by 20 to 30 percent.

BERGSTEN: That's the equivalent of a subsidy on all exports of 20 to 30 percent; an additional tariff on all imports of 20 to 30 percent, and this is by the largest trading country in the world.

WELNA: Democrats brought up this populist-flavored legislation prior to planned votes on three controversial and long-pending trade deals with South Korea, Panama, and Colombia. That's fine with South Carolina Republican Senator Lindsey Graham, a co-sponsor.

SENATOR LINDSEY GRAHAM: Regardless of the motives, it's an opportunity to pass the bill, and some people would say it gives political cover, because the trade agreements are coming, it's a nod to the unions. And what I say is that it's with policy changes that are long overdue, that Republicans and Democrats see this the same.

WELNA: One of those Republicans is Ohio Senator Rob Portman; he pushed for a revaluation of China's currency as U.S. trade representative during the last Bush administration.

SENATOR ROB PORTMAN: I believe this administration should label China a currency manipulator, because I think it's clear that there continues to be manipulation.

WELNA: But the Obama White House has pointedly avoided endorsing the China currency bill. White House spokesman Jay Carney, yesterday, expressed concerns the bill could cause what he called consistency issues with the nation's international commitments.

JAY CARNEY: We have, from the beginning, as an administration, worked on the issue of the undervalued Chinese currency. And it has appreciated to some degree, as a result, we think, of those efforts. More needs to be done.

WELNA: Just as it's divided Democrats, the China legislation has also split Republicans. Lamar Alexander, the Senate's number three Republican, calls the bill a punch in China's nose.

SENATOR LAMAR ALEXANDER: History teaches us they'll punch us right back in the nose and the result will be a trade war which destroys jobs rather than creates jobs.

WELNA: But another of the bill's co-sponsors says such warnings are overblown. New York Democratic Senator Charles Schumer says China depends far more on the U.S. as an export market than the U.S. does on China for its own exports.

SENATOR CHARLES SCHUMER: So while China will retaliate in a measured way, they're not going to create a trade war. It's not in their interests, they can't afford to.

WELNA: A key vote today could come from Senate Republican leader Mitch McConnell, he says he has not yet made up his mind.

SENATOR MITCH MCCONNELL REPUBLICAN, KENTUCKY: I'm still looking at it. I want to see what it looks like at the end.

WELNA: Even if the bill does pass in the Senate, it could face a tougher climb in the House. Speaker John Boehner signaled as much earlier this week

REPRESENTATIVE JOHN BOEHNER: I think it's pretty dangerous to be moving legislation through the United States Congress, forcing someone to deal with the value of their currency. This is well beyond, I think, what the congress ought to be doing.

WELNA: House members who think otherwise are circulating a petition to force a vote on the bill in the lower chamber as well. They claim they have the numbers there to pass it.

David Welna, NPR news, the Capitol.

(SOUNDBITE OF MUSIC)

NEARY: This is MORNING EDITION from NPR News.

Copyright © 2011 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.