US senator urges China to tackle trade issues soon
(AFP)
Updated: 2006-01-11 09:05

A US senator has warned a bill that threatens to slap heavy tariffs on Chinese imports would pass unless China quickly takes further steps to tackle its trade imbalance with the United States.

"If it actually comes up for a vote, a lot of members of the Congress are going to be sorely tempted to support it," said Democrat Max Baucus, a senior member of the Senate Committee on Finance.

US senator Max Baucus, pictured here in 2003, has warned a bill that threatens to slap heavy tariffs on Chinese imports would pass unless China quickly takes further steps to tackle its trade imbalance with the United States. [AFP]

Democrat Senator Charles Schumer, a leading China critic, threatened last month to bring to a vote this year a bill to impose a tariff of 27.5 percent on Chinese goods if Beijing does not allow its currency to appreciate before then.

US manufacturing groups claim that a weak yuan unfairly disadvantages US-made goods.

"I strongly oppose the Schumer bill but on the other hand I can see why a good number of members of Congress ... would support it," Baucus said.

"China has a major role ... the role is to take significant action on its own ... to show the US and the members of the Congress that, hey, China is being responsible and ... is doing something to address the issue."

He added that China's move to revalue its currency by 2.1 percent last July was "clearly not enough".

China also scrapped its peg to the dollar, replacing it with a basket of currencies at the same time.

This was seen as a small move by critics in the Unites States who believe China is keeping the yuan undervalued by anywhere between 15 percent to 40 percent.

The Bush administration has been calling on China to allow more "flexibility" in the value of the yuan.

However, Baucus urged critics in the United States to refrain from seeing China as a threat, saying many Congress members want to work towards "a more rational policy" towards Beijing.