Legislation Will Level the Playing Field, Protect American Jobs

WASHINGTON —Today, U.S. Senator Debbie Stabenow (D-MI) announced her intention to introduce the Currency Manipulation Act. The announcement comes on the heels of a recent report from the administration that countries, such as China, continue to undervalue their currency. Stabenow’s legislation provides a clear definition and methodology of currency manipulation which will help prevent foreign countries from gaining an unfair competitive advantage at the cost of American jobs.

“Currency manipulation is a clear-cut form of unfair trade that is costing us jobs,” said Stabenow. “Our laws must provide mechanisms to identify countries that manipulate their currency while also providing remedies, so our workers are not put at a disadvantage. My legislation will do just that by holding countries that cheat accountable and promoting a level playing field throughout the world.”

Currency manipulation is the practice by which a government achieves an unfair trade advantage by artificially lowering its currency’s value providing a subsidy to their domestic firms, enabling them to undercut American businesses and workers. Stabenow has been a long-time proponent for legislation that outlines clear standards by which to identify and punish countries that manipulate their currency.

Provisions in the Stabenow legislation:

• Ensures that standard remedies are put in place to offset the subsidy effects when a government undervalues its currency. Currently, such U.S. trade remedies have not yet been applied.

• Provides an explicit definition of when currency misalignment occurs and directs the U.S. Department of Commerce to measure whether a country's currency is fundamentally misaligned. These calculations will be public and will use reliable data available from the IMF as well as the two primary methodologies and guidelines that the IMF follows in its computations of exchange-rate misalignment.

• Provides a solution for any currency undervaluation. The intervention can be offset by means of either countervailing duties or antidumping duties. These remedies are imposed only when the U.S. International Trade Commission determines that the unfair practice has caused or threatens to cause material injury to U.S. companies and workers. Also, it focuses on the effect or impact of the exchange-rate misalignment regardless of the purpose. Imposition of only one or the other remedy of countervailing and antidumping duties will be allowed to prevent “double-counting.”

• Directs the U.S. Department of Commerce to treat currency undervaluation as a prohibited export-contingent subsidy.