Senator Blumenthal Calls For Swift Action to Level Playing Field for Connecticut Businesses, Workers

Blumenthal Urges Fully Open Markets, End to Currency Manipulation, Restoring Trade Balance with China

(Washington, DC) – Senator Richard Blumenthal today called for decisive action to level the playing field for American workers, urging Treasury Secretary Tim Geithner to demand fairer market practices of China during his meetings with visiting President Hu Jintao.  Blumenthal has previously criticized the Chinese government for failing to open fully China’s market to American products and engaging in illegal practices such as the deliberate undervaluation of its currency, costing U.S. jobs and putting American companies at a competitive disadvantage by contributing to our nation’s growing trade deficit with China. 

 “While our economy continues to recover and Connecticut families continue to struggle, China’s refusal to play by the rules further hinders our ability to turn our economy around, and has cost us thousands of jobs,” said Blumenthal.  “We know America’s workers can compete with anyone, given a level playing field, so we must take all necessary steps to restore fairness to our trading relationship with China and stem the loss of further U.S. manufacturing jobs.” 

In the letter, Blumenthal tells Geithner:

As I have traveled around Connecticut in recent weeks, I have met with local business leaders and manufacturers to discuss ways to get our economy back on track. During those meetings, I have repeatedly heard about the importance of ensuring that American businesses have a level playing field on which to compete.

To that end, I urge you to stress to President Hu the need for China to uphold its commitment to opening its markets to American goods and services. More than 27,300 jobs in Connecticut - and nearly 2.5 million jobs nationwide - have been lost since 2001 due to the growing trade imbalance with China.  

China's deliberate undervaluation of its currency boosts its exports and discourages imports, which contributes to our growing trade deficit with China and costs U.S. jobs.  For these reasons, a growing number of economists and trade experts are calling for the federal government to take swift action to address this situation. By some estimates, China’s fixed currency rate helps to keep the price of its products 40 percent lower than they would otherwise be.  This government-sanctioned subsidization of Chinese products puts American companies at a competitive disadvantage.

Blumenthal has been a consistent voice in the fight to end Chinese market practices that create an unfair playing field for American workers; as Connecticut’s Attorney General, he called on Secretary Geithner to declare China a currency manipulator.


Text of Letter Follows:

Dear Secretary Geithner:

I am writing to ask that during the visit of Chinese President Hu Jintao to the United States, you raise an issue that is of the utmost importance to manufacturers in Connecticut and around the country: the Chinese government's failure to fully open its market to American products. 

As I have traveled around Connecticut in recent weeks, I have met with local business leaders and manufacturers to discuss ways to get our economy back on track. During those meetings, I have repeatedly heard about the importance of ensuring that American businesses have a level playing field on which to compete.

To that end, I urge you to stress to President Hu the need for China to uphold its commitment to opening its markets to American goods and services. More than 27,300 jobs in Connecticut - and nearly 2.5 million jobs nationwide - have been lost since 2001 due to the growing trade imbalance with China.  

I am troubled by reports that China has unfairly used export subsidies, tariffs on imports, and other means to aid domestic producers of cutting-edge green technology such as advanced batteries and fuel cells, wind and solar energy products, and clean-energy vehicles. And I am particularly troubled by the Chinese government's continued manipulation of its currency to give Chinese manufacturers an unfair advantage in international trade. 

Last April, I wrote to you in my capacity as Connecticut's Attorney General, asking you to declare China a currency manipulator. As you know, when China joined the World Trade Organization in 2001, it agreed to binding commitments regarding the management of its economy. However, the Chinese government has refused to abide by these commitments.  The on-going Chinese currency manipulation is not only a direct violation of WTO rules, it is also a major impediment to America's efforts at an economic recovery.

China's deliberate undervaluation of its currency boosts its exports and discourages imports, which contributes to our growing trade deficit with China and costs U.S. jobs.  For these reasons, a growing number of economists and trade experts are calling for the federal government to take swift action to address this situation. By some estimates, China’s fixed currency rate helps to keep the price of its products 40 percent lower than they would otherwise be.  This government-sanctioned subsidization of Chinese products puts American companies at a competitive disadvantage.

I know you agree with me that America's workers can compete with anyone, given a level playing field.  But our workers cannot compete with the deliberate, illegal and abusive manipulation of international trade by the Chinese government. The need for real, tangible progress on this issue has never been clearer, as our trade deficit with China last year reached a record $252 billion.

Earlier this year, China agreed to loosen its artificial grip on the value of its currency, but to date their government has largely failed to live up to that promise. If the Chinese government abides by its prior commitments and those international rules to which it has previously agreed and allows its currency to fluctuate, American workers - and the communities in which they live - would reap the benefits. By some estimates, such an action by the Chinese government would boost U.S. employment in the manufacturing sector by nearly 700,000 jobs, at no cost to the U.S. taxpayer.   

During President Hu's visit to Washington, I urge you to demand that China abide by its international commitments and make clear that the U.S. government is prepared to make use of all available trade remedies at our disposal to restore fairness to our trade relationship if it does not do so.  

Sincerely,

Senator Richard Blumenthal

 

# # #