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US senators act to repeal China PNTR status
(Agencies/chinadaily.com.cn)
Updated: 2006-02-10 10:44
Graham is behind another measure that would force China to revalue its currency or face higher tariffs on Chinese imports. The legislation, to impose a 27.5 percent tariff across the board on Chinese imports, has support in Congress, the lawmakers say.
Cautioning the lawmakers, US Trade Representative Rob Portman said any decision to withdraw the PNTR from China could boomerang.
"To me it would do nothing to help with the trade deficit, in fact the reverse, relative to China," Portman told reporters .
China freed the yuan from an 11-year-old peg to the US dollar last July, revaluing it by 2.1 percent and putting it in a trade-weighted basket of currencies. The yuan was also allowed to move 0.3 percent either way on any given day.
Portman pointed out that China was a vital market for the United States. It is the biggest US export market in terms of growth, averaging around 15 to 20 percent over the last two years, among large economies, he said.
"It's been a great export market for us, and part of that is because they're now in the WTO, we're able to not only seek lower tariffs ... (and) we should not lose sight of the fact that in the export side it's created a lot of jobs in the US," Portman explained.
Imports and export alone do not determine the trade deficit, he said, citing other factors like the macroeconomic situation. He referred to the increasingly large saving rates in China compared to those in the United States and the "extremely high U.S. consumption rate” relative to China.
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