[Congressional Record (Bound Edition), Volume 157 (2011), Part 11]
[Senate]
[Pages 15079-15080]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       CHINA CURRENCY LEGISLATION

  Mr. SESSIONS. Mr. President, I am here to share a few thoughts as we 
move to the final vote on the China currency legislation that I believe 
we must pass. I find it difficult, almost impossible, to believe there 
is a universal acceptance of the fact that the manipulation of currency 
by the Chinese Government--their efforts to keep their currency low, 
tied directly to the U.S. currency, regardless of the economic forces 
in the world that would argue for and set a different relationship 
between those currencies--the net result of that has been to damage the 
American economy, and I do not think anybody disputes it.
  In fact, some of my colleagues in this body who have opposed the 
legislation out of fear of a trade war or something else have all 
acknowledged that the currency factors set by China are not good. They 
all acknowledge it adversely impacts the economy of the United States 
and costs American jobs. It is not right. It is just not right, and we 
are losing jobs dramatically.
  The Federal Reserve Chairman--I would ask us to ask ourselves: Is Mr. 
Bernanke, the Chairman of the Federal Reserve, a protectionist? Is he 
somebody who does not believe in trade? Is he somebody who is trying to 
stop trade? I do not think so. This is what he said last week on the 
question of jobs in his testimony before the House:

       Right now, our concern is that the Chinese currency policy 
     is blocking what might be a more normal recovery . . . in the 
     global economy.

  Blocking a normal recovery from a recession. He goes on to say:

       It is to some extent hurting the recovery.

  That is the Federal Reserve Chairman. So I do not understand the 
thought that somehow--when we say we have an obligation to our 
constituents to defend their legitimate interests on the world's stage 
in a global economy, to make sure the global economy, where trade is so 
valuable to us, is conducted in a fair way--it is not a fair system and 
it has been going on for over a decade. Our leaders--former Presidents, 
President Obama--all of them, when the chips are down, do not do 
anything significant to confront this problem. They just allow it to 
continue, and we are hemorrhaging jobs. Maybe more than a million jobs 
have been lost as to this one currency manipulation alone. I think it 
is unhealthy for the country.
  I am worried about the middle class in America. I do not believe you 
can have a middle class in America without a vibrant manufacturing 
base. Many of those supporting free trade say we are going to become a 
service economy. But I do not see people working in the service 
industries making the kind of $50,000, $60,000, $70,000 a year salaries 
that people do in major manufacturing companies. They just do not. 
There are various benefits from some of those jobs, and some of the 
people enjoy it, and it fits their skill level and what they want to 
do, and it is fine to say that. But to acknowledge we no longer are 
going to be a manufacturing nation does not make sense to me.
  I believe we have no choice but to develop a sustained, effective 
policy to raise this question in a way that it cannot be avoided, and 
to confront our trading partners--China--with this manipulation and to 
say we wish to have a great, positive relationship here, we are not 
afraid to trade, we are not trying to hamper your economy, we think the 
world would be better if China's economy is healthy and growing, but 
not at our expense, not in a way that unfairly places American 
manufacturing at a disadvantage.
  When your currency is 25 to 30 percent under value, it means that 
when we export a product, the product costs 30 percent more in China 
than it would otherwise have cost if the currency were right. China is 
not going to buy it if it costs 30 percent more. If you import a 
product from China--manufactured in China--to the United States, not 
only do they have an advantage of lower wages, but they have a 30-
percent, a 25-percent currency advantage. We are just going to say: 
``Oh, this is just the way of the world. There is nothing we can do 
about it. We believe in free trade''?
  Well, as I have said, I believe in trade. I believe in good trade. My 
record I think will indicate that. But I have told my constituents--and 
I think most of us in the Senate and in the House talking to our 
constituents--we say we believe in trade, but we believe in fair trade. 
We believe in defending our workers from unfair competition. We will 
stand up and take our lumps and we will take our gains in a fair 
competition. But we do not sit by and let our workers lose their jobs, 
have our plants close as a result of an unwillingness on behalf of the 
government in Washington to defend their interests. How much common 
sense is that?
  Mr. Bernanke, the Wall Street Journal, all the others--the Club for 
Growth--they all acknowledge this is an unfair trade practice. They all 
acknowledge it hurts us. But they say we cannot do anything about it. 
Well, we will keep on talking. We will let the administration keep 
talking and maybe they can work this thing out. But it has been going 
on for years and it has not been worked out, for reasons I am not able 
to understand.
  A major American manufacturer can decide that: Well, China has lower 
wages and now they have a 30-percent advantage in currency, why, we 
could close our plant here in New Mexico or we could close our plant in 
Alabama or Ohio and we will move it to China, and we will make that 
product over there, and we can import it with a 30-percent currency 
advantage on top of labor, and we will make more money that way.

[[Page 15080]]

  I think that is how decisions are being made in this country right 
now. They are being made in that fashion. If you are a stockholder in 
one of those companies, you would say: That makes common sense to me. 
But I am not here as a stockholder in a company. I am here as a U.S. 
Senator, representing 4 million Alabama constituents, really 
representing the interests of the United States of America, and I do 
not think it is good for America. It might be good for this company or 
that company, but it is not good for America. I do not think--in fact, 
I am confident it is not. It has to end, and we need to defend 
aggressively on the world stage the legitimate interests of American 
manufacturing and American workers. We have not done that. It has 
caused a lot of frustration out there and it has caused a lot of job 
loss, in my opinion.
  Well, they say, if you stand up here and you tell the Chinese, look, 
you have had 9 percent growth last year and are looking for another 9 
percent growth this year--you are the No. 2 economy now in the whole 
world--if we tell them a lot of this has been the result of taking 
advantage of U.S. trade policy, and they have to stop, this will 
somehow make them mad and this will make them angry and they will 
commence a trade war against us. That is what the argument basically 
is.
  And they say: Oh, you remember during the Depression the Smoot-Hawley 
Tariff Act. That created a tariff war around the world and helped 
prolong the Depression. And it did. Well, let me tell you, this is not 
the Smoot-Hawley Tariff Act. It is not. First of all, the United States 
was a major exporting juggernaut in the 1930s, and we placed tariffs on 
goods coming into our country to try to give an advantage to our folks, 
and others retaliated, and we, as an exporting nation, ended up losing 
more than they did. It was stupid policy and it redounded to our 
disadvantage.
  It was a worldwide tariff we placed on all products. Hopefully, there 
will not be any tariffs imposed under this legislation. Hopefully, as 
the process goes forward our Chinese trading partners will begin to 
retreat from their indefensible position, and it will not happen. But, 
again, it is only targeted where we have major currency manipulation.
  It is not a worldwide tariff, No. 1; and, No. 2, as Mr. Gordon Chang, 
writing in Forbes magazine, noted, indisputably: China is the exporting 
juggernaut in today's world. We are the world's biggest importer.
  I don't guess there has ever been in the history of the world a 
larger trade imbalance than between the United States and China. We 
import, they export. So as he noted, in a trade tariff situation, which 
is bad for everybody, I acknowledge the nation that is hurt the worst 
is the exporting nation. That would be China.
  So why would China, despite their bluster, why would they create a 
real trade war with the United States? One-third of their exports or 
more go to the United States. This is a huge part of their growing 
economy, and I am happy that China is making financial progress. I 
sincerely hope they will be able to continue to do so, but it cannot be 
done at our expense.
  So I would say the Smoot-Hawley argument is not a good one. Neither 
is the fact that China would execute a trade war with the United 
States. It just makes no sense for them to do so. They would be cutting 
off their noses to spite their faces.
  One thing that is good in a manufacturing economy is that we sell 
products and we bring home wealth. If we can manufacture and we can 
export that product, we can bring home wealth, and that wealth can be 
used to purchase other foreign products and bring those into the 
country. It is the kind of thing that can, if properly conducted, 
benefit the entire world.
  I tease my free-trade colleagues--those for whom free trade is a 
religion--that they believe that trade, once it breaks out in the 
world, peace will abound and cancer will be cured. That is all we have 
to do is eliminate all trade barriers. But the trade barriers are not 
being eliminated. That is the problem.
  One of the biggest trade barriers we have is the currency 
manipulation by China. It is by far--they do a lot of things. They 
steal our manufacturing copyrights and secrets and techniques in 
violation of international law. They subsidize domestic manufacturing 
in many different ways. If we want to do business in China, we have to 
partner with a Chinese company and give them half the company. They 
block the sale of rare earth minerals around the world. They do all 
kinds of things that are not the kinds of things good trading partners 
ought to be doing, not to mention their foreign policy which buddies up 
with North Korea, Iran and other rogue nations.
  China needs to be participating positively in the world community, 
not trying to take advantage of other countries, making bucks off them, 
and trying to do things that seem, at times, for no other purpose than 
to frustrate the legitimate interests of the United States and the 
world community.
  So China has some problems. It is time for them to get straight. I 
urge them to do so. They cannot continue currency manipulation. That is 
destroying jobs in the United States, and we will not have it. When we 
have this vote that will be coming up before long, I think it will be 
more than just a normal vote around here. I believe it will be a vote 
that says to the whole world: The United States is waking up. We are 
free traders, all right, but not any trade agreement is going to be 
good in the future. If you are not complying with your promises under 
trade agreements, we are going to hold you accountable. We will do what 
it takes to hold you to the agreement, and we will not trade with you 
if you manipulate the trade rules. We insist that the world economy 
operate on a fair and lawful basis, that is healthy for us.
  If we do this right, we can do it in a way that is not protectionist, 
not antitrade, but creates the foundations for even more and healthier, 
better trade for the whole world. That is my vision of where we are 
today. I think we should move forward and pass this legislation. I urge 
my colleagues in the House to do likewise. In the long run we will 
benefit.
  I thank my Republican colleague, Senator Graham, and others on this 
side who voted for it, and Senator Schumer and Senator Brown and 
Senator Stabenow and others on the Democratic side who have been 
leaders in this effort. I believe it is time for the President to get 
the message. I think it is time for Wall Street to get the message. I 
think it is time for the American people to get focused that there are 
some decisions being made now--without protectionism, without nativism, 
but legitimate public interests that will create jobs in America.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.

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