“Like Congress and the administration, we agree that China needs a yuan exchange rate that responds to trade flows and that China should move steadily towards a market-determined exchange rate,” the coalition wrote. “In addition to continuing US government efforts, our organizations support strong, coordinated and enhanced multilateral pressure through multiple international organizations such as the G-20 and APEC to achieve concrete progress on China’s currency and exchange rate policies.”
However, the groups expressed concern that unilateral legislation on this issue would be counterproductive to these shared goals, as well as to the broader goals of the US in addressing growing challenges in China, including inadequate protection of intellectual property, restrictions on market access, the need for financial services liberalization, restrictions on the export of commodities such as rare earths, discriminatory indigenous innovation and other industrial policies.
“Above all, such legislation would do more harm than good to job creation and economic growth at a time when the US dearly needs both,” the groups stated.
A bill increasing tariffs on Chinese imports is unlikely to incentivize China to move expeditiously to modify its exchange policies, the groups also contended in the letter. “Rather,” they wrote, “it would likely have the opposite effect and could engender retaliation against US exports into the Chinese market – currently the fastest-growing market for US exports.
“We urge you to oppose currency legislation and instead work with and vigorously call on the administration to develop a robust bilateral and multilateral approach to achieve tangible results not only on China’s exchange-rate policies, but also on other Chinese policies that are harming American economic interests,” the letter concluded.