WASHINGTON (AFP) — A US Congress-appointed commission on Thursday accused China of manipulating its currency and called for legislation imposing penalty tariffs on Chinese goods flooding the American market.
Some lawmakers have charged that Beijing has undervalued its yuan currency in order to boost its exports, saying it is a key reason for the snowballing bilateral US trade deficit.
The United States-China Economic and Security Review Commission, in a report to Congress Thursday, proposed that "Congress enact legislation to define currency manipulation as an illegal export subsidy and allow the subsidy to be taken into account when determining penalty tariffs.
"In addition, Congress should amend the law to allow currency manipulation to be added to other prohibited subsidies when calculating antidumping and countervailing duty penalties," it said.
The US Senate is already considering bills that would allow the US government to push nations to adopt more market-based currency policies or face sanctions, and requiring the US Treasury Department to penalize countries with "misaligned" currencies.
The US Treasury has in the past stopped short of branding China a "currency manipulator," a designation that could lead to economic sanctions.
"While speaking of subsidies and violations of free market principles, it is worth noting here that China is continuing to manipulate the value of its currency in order to gain an unfair export advantage," said commission chairman Carolyn Bartholomew.
"The artificially low value of the renminbi (yuan) provides a subsidy for Chinese exporters and serves as a hindrance to Chinese importers and consumers," the report said.
Bartholomew also said that China had not fulfilled pledges to protect the intellectual property of foreign business software and entertainment companies from rampant piracy.
China has also been accused of failing to reduce the many subsidies provided to exporting industries in the country.
Both the intellectual property and subsidy issues are subjects of formal US complaints before the World Trade Organization.
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