Both Republican and Democratic lawmakers expressed growing concerns Thursday with the Obama administration's trade policy toward China and what they say is its inability to get the world's third-largest economy to change. U.S. Lawmakers also announced that in the coming days they will move forward on legislation that seeks to punish China for refusing to revalue its currency - a practice they argue has led to a massive loss U.S. jobs.
Lawmakers from the east coast to the west coast of the United States are voicing frustrations with U.S. trade policies toward China and the government's inability to help create a more level playing field with Beijing. They are also concerned about what they say is the lack of progress on wide a range of issues from intellectual property to the valuation of the Chinese currency.
Testifying before a Senate Finance Committee hearing Thursday, U.S. Treasury Secretary Timothy Geithner admitted numerous times that there were challenges to trade relations with China. But, he also says recent growth in U.S. exports was a sign that China and other countries were buying more American goods.
Chuck Schumer, a democratic senator from New York says that while exports to China may be growing, companies like those in his home state and those of other lawmakers across America tell a different story about the state of trade relations.
"Everyone of us who visits our companies, we hear of China not playing by the rules in every way. We could gain a lot more exports. And look at all the imports that come in from China," he said.
Schumer says that because of this, he and several other of his colleagues will "soon" move forward with legislation that will provide specific consequences for countries that fail to adopt policies that eliminate currency misalignment.
"I don't think anyone on either side of the isle is satisfied with the results and that's why we need to take stronger action than just diplomatic back and forth," said Schumer.
In April, the U.S. Treasury Department delayed the release of a report that could have labeled China a currency manipulator. Economists and analysts say the administration made the move to give China the time and space to let the value of its currency rise.
It is estimated that China's currency, the yuan, is undervalued by about 40 percent.
Many U.S. manufacturers and members of Congress argue that China's currency valuation contributes to the massive American trade deficit. They also say it makes it difficult for American companies to compete with Chinese enterprises.
U.S. officials have been expressing their confidence that China will eventually let the value of the yuan rise and see that it is in its best interest to do so.
When the U.S. and China held their Strategic and Economic Dialogue in Beijing last month, Chinese President Hu Jintao pledged to let the currency rise, but on China's own timetable.
During the talks, China agreed to take steps to modify a controversial policy called "indigenous innovation" that U.S. and other international businesses have complained makes it difficult for foreign companies to compete in the country.
The policy gives advantages to companies bidding for government contracts that conduct their research and development in China and patent their innovations there.
In Beijing, China committed to submit a revised offer to join a World Trade Organization agreement (the WTO Government Procurement Act) by July that sets standards for international access to government contracts.
However, U.S. lawmakers see no overall change in the relationship and believe China's promises are just another stall tactic.
Ron Wyden, a democratic senator from the state of Oregon says he sees nothing but a broken trail of promises from China from the time it joined the World Trade Organization.
Wyden noted that 10 years ago, China made a similar pledge to join the WTO's Government Procurement Agreement.
"Given the fact that we've got a piracy problem, given the fact that we've got a projectionist policy, with regards to getting the products of the future, the innovation goods, the technology goods into China and we still aren't there on currency," said Wyden. "I still want to know, at what point [are] you going to stop the slow dancing? At what point will we take stronger action?" He asked.
Treasury Secretary Geithner says he does not disagree with the scale of the challenges ahead and the lack of progress it has made on some of its pledges. But disagreed that no progress was being made - especially when it comes to exports to China.
"One of the best rules [of thumb] that we have are the scale of exports to China and things the U.S. creates and makes. Those numbers are getting stronger at an accelerating rate and that is very important," said Geithner.
Geithner told lawmakers that U.S. exports to China have rebounded much more rapidly than overall U.S. exports, and are now 20 percent higher than where they were before the global financial crisis began.
He says that China is already the third largest destination for U.S. merchandise exports, a big leap above its spot at 11th largest destination for American goods a decade ago.
