China: Senate Dem Legislation Would Spark a Trade War

From Reuters:



China warned the United States that it would damage relations, and American jobs, if it forces Beijing to let its currency rise under a law to be voted on in the U.S. Senate on Tuesday.

Vice Foreign Minister Cui Tiankai on Monday underlined Beijing’s opposition to the bill, saying it could trigger a trade war and hold back global economic recovery. He said that relations could also be hurt by U.S. arms sales to Taiwan.

“(The currency bill) in no way represents the reality of the economic and trade relationship between China and the United States, and it might have an adverse impact on the development of the relations between the two countries,” he said.

“Should the proposed legislation become law, the only result would be a trade war between China and the U.S. and that would be a lose-lose situation for both sides,” said Cui, who currently heads the China delegation for G20 negotiations.

China’s central bank, and commerce and foreign ministries last week jointly warned that enactment of the proposed currency law could lead to a trade war between the world’s two top economies.

“If this type of situation occurs, of course it would be detrimental to the development of economic and trade relations between China and the U.S. and detrimental to U.S. economic and job growth,” Cui said. “At the same time, it would hinder global economic recovery.”

The White House has voiced concerns that the legislation, which calls for tariffs on imports from countries with deliberately undervalued currencies, could violate international trade rules.

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