“The United States cannot repair its broken jobs engine without first solving the China currency problem,” said FCC Executive Director Charles Blum, noting that China’s currency, the renminbi (RMB), is undervalued by an estimated 35 to 40 percent.  “Products from China are frequently priced at less than the cost of the materials contained in the products,” Blum continued. “This is illegal government subsidization, pure and simple, and it destroys American jobs. Applying CVD law to combat this illegal export subsidy is a ‘must have’ ifAmerica is to achieve a sustainable recovery."
 
AFL-CIO Secretary-Treasurer and FCC Co-Chair Richard L. Trumka thanked Congressmen Michaud and Ryan for their letter and said, “The working families of this country need jobs now.  If we want a recovery that will invest in manufacturing, boost exports, balance trade, and create jobs we must stop China and other countries from illegally manipulating their currency.  China’s prolonged undervaluation of the RMB is an illegal export subsidy.  That is why the U.S. government must allow CVD cases to proceed. American workers expect their government to stand up for them."
 
Export subsidies are prohibited under the World Trade Organization rules.  When subsidies cause injury, those rules mandate a countervailing remedy.  Because the U.S. Commerce Department continues to refuse to investigate allegations of prolonged currency misalignment, tens of thousands of jobs and even entire industries are being lost. 
 
Prolonged currency misalignment occurs when a foreign country misaligns its currency to the U.S. dollar for a prolonged period at a below market rate.  This acts both as an unauthorized trade barrier and as an illegal export subsidy, making goods from the offending country artificially less expensive compared to products made in the United States. 
 
China’s undervalued currency subsidy is a key reason why the United States has (a) lost 5.7 million manufacturing jobs in the last decade, (b) lost 8.4 million nonfarm jobs since the recession began in December 2007, and (c) run a $1.9 trillion current account deficit with Chinain the last decade.  It is also is why U.S. industrial output was lower last month than one decade ago despite (1) a U.S. population increase of more than 25 million, (2) a global population increase in neighborhood of 750 million, and (3) the approximate 50 percent growth of the world’s Gross Domestic Product (GDP).
 
The FCC is an alliance of industry, agriculture, and worker organizations seeking to support U.S. manufacturing and production by seeking an end to the illegal export subsidy of prolonged currency misalignment.  Additional information that describes the FCC and its mission can be found at www.faircurrency.org.
 

Additional Quotes Supporting Michaud Ryan Letter
 
American Iron and Steel Institute (AISI)
 
“AISI and its members thank Congressmen Mike Michaud and Tim Ryan for their leadership in sending a strong message to the Administration that inaction in the face of China’s continued significant undervaluing of its currency, is not acceptable,” AISI President and CEO Thomas J. Gibson, said.  “It’s essential, if we are going to achieve the President’s goal of doubling exports that we address this particularly damaging aspect of China’s unfair trade practices.  It is long past the time for our government to declare China a currency manipulator given the damage that China’s severely undervalued currency has done to American manufacturers, their employees and their communities.”
 
American Manufacturing Trade Action Coalition (AMTAC)
 
“We thank Congressman Michaud and Ryan and support their letter,” said AMTAC Executive Director Auggie Tantillo.  “China’s export subsidies, such as their illegally undervalued currency and ongoing VAT rebate schemes, are a ball-and-chain on the leg of U.S.manufacturing, destroying hundreds of thousands of jobs.  If the government is serious about spurring job creation, then it should fellow the recommendations in the Michaud/Ryan letter.
 
Steel Manufacturers Association (SMA)
 
“The undervalued currencies of several governments are in effect an import tax and an export subsidy, injuring industries in countries that are recipients of imports made more competitive by currency undervaluation.  Application of U.S. CVD law will help correct this problem with respect to nations that continue to manipulate their currencies,” said Thomas A. Danjczek, President of SMA.
 
United States Industrial Fabrics Institute (USIFI)
 
“U.S. businesses are innovative, efficient, productive, and able to supply affordable products globally.  What individual U.S. companies cannot do is to require our trading partners to abide by World Trade Organization (WTO) rules.  We rely on U.S. government action to make everyone play by the same set of rules.  The current legislative effort to curtail currency manipulation would help do that.  USIFI strongly supports the work spearheaded by Congressmen Michaud and Ryan and asks the Obama Administration to implement their suggestions,” said Ruth Stephens, Executive Director of USIFI.  
 
# # #
 
 
Michaud/Ryan release and letter…..
 
FOR IMMEDIATE RELEASE
March 15, 2010
CONTACT:
Ed Gilman (Michaud), 202-225-6306
Heather McMahon (Ryan), 330-442-0950
 

 
WASHINGTON, DC – Today, Congressmen Mike Michaud (ME-02) and Tim Ryan (OH-17) sent a letter that was signed by a bipartisan group of their colleagues to Treasury Secretary Tim Geithner and Commerce Secretary Gary Locke urging them to immediately address the growing problems associated with China’s continued currency manipulation.
 
“China’s currency manipulation essentially subsidizes Chinese exports and imposes tariffs on foreign imports.  This presents an insurmountable trade barrier to U.S. manufacturers,” said Michaud.  “If the administration fails to act on this issue it will hold back our economic recovery and hurt the ability of American small businesses and manufacturers to increase their production, keep their doors open, and create jobs.”
 
“China continues to flout international trade laws by manipulating its currency value to increase its trade advantages,” stated Congressman Ryan. “This is completely unacceptable.  All that our people are asking for is a level playing field. Local manufacturing firms in Ohio, like GE Lighting, Severstal Steel, V&M Star, Wheatland Tube and Backyard Buddies, are doing everything in their power to stay afloat during a difficult economy while China continues to break the rules at every turn.  I am fighting – and will continue to fight – on their behalf, forcing China to play fair and discontinue these illegal trade practices.”
 
The full text of the letter, as well as those who signed it, can be found below.
 
March 15, 2010
 
Dear Secretary Geithner and Secretary Locke:
 
We write to express our serious concerns about China’s continued manipulation of its currency. By pegging the renminbi (RMB) to the U.S. dollar at a fixed exchange rate, China unfairly subsidizes its exports and disadvantages foreign imports.  As we work to promote a robust U.S. economic recovery, it is imperative that we address this paramount trade issue with all available resources.  We urge your agencies to respond to China’s currency manipulation with the actions outlined in this letter.  Doing so will allow American companies and workers to compete fairly against their Chinese counterparts and will boost U.S. economic recovery and growth.
 
The impact of China’s currency manipulation on the U.S. economy cannot be overstated.  Maintaining its currency at a devalued exchange rate provides a subsidy to Chinese companies and unfairly disadvantages foreign competitors.  U.S. exports to the country cannot compete with the low-priced Chinese equivalents, and domestic American producers are similarly disadvantaged in the face of subsidized Chinese imports.  The devaluation of the RMB also exacerbates the already severe U.S-China trade deficit.  Statistics show that between January 2000 and May 2009,China’s share of the U.S. trade deficit for non-oil goods grew from 26% to 83% — an untenable pattern for American manufacturers.  And finally,China’s exchange-rate misalignment threatens the stability of the global financial system by contributing to rampant Chinese inflation and accumulation of foreign reserves.  For these compelling reasons, we ask your agencies to pursue the course of action below.
 
First, we urge the Department of Commerce to apply the U.S. countervailing duty law in defense of American companies who have suffered as a result of the currency manipulation.   The U.S. is permitted to respond to subsidized imports where the elements of a subsidy are met under the countervailing duty law.  The countervailing duty law outlines a three-part test to identify the presence of a countervailable subsidy:  1) that it involves a financial contribution from the government; 2) that it confers a benefit; and 3) that is specific to an industry or a group of industries. China’s exchange rate misalignment meets all three parts of this test and therefore merits the WTO-permitted application of countervailing duties.
 
Second, we ask the Department of Treasury to include China in its bi-annual agency report on currency manipulation.  Since 1994 Treasury has not identified China as a country that manipulates its currency under the terms of the Omnibus Trade and Competitiveness Act of 1988 (“Trade Act of 1988”), but Secretary’s Geithner testimony to the Senate acknowledging that fact surely justifies the inclusion of China in the report.  After labeling the country as a currency manipulator, Treasury should enter into negotiations with China regarding its foreign exchange regime.  These combined actions will signal the government’s willingness to take decisive action against China’s currency manipulation, including the potential filing of a formal complaint with the World Trade Organization.
 
The recommendations identified above must be done in concert with intense diplomatic efforts, not only with China but also with the IMF and multi-laterally with other countries.  Through a combined strategy of legal action and international pressure, it is possible China will revisit its undervaluation of the RMB.  If these efforts are not successful, we ask the Administration to consider all the tools at its disposal, including the application of a tariff on Chinese imports, to respond to China’s currency manipulation.  The economic impact of the RMB undervaluation on American businesses and workers is too great for the Administration not to pursue a comprehensive effort. 
 
This economic downturn has underscored the pressing need to promote policies that protect U.S. jobs and U.S. businesses.  Addressing China’s manipulation of its currency must be a critical part of our strategy to rebuild our economy and establish safeguards against future financial crises.  The Administration has the legal ability and resources to protect American businesses in the face of China’s RMB devaluation, and we urge you to exercise this authority expeditiously.
 
Thank you for your consideration of this letter.  We look forward to your response.
 
1.      Aderholt (R-AL)
2.      Altmire (D-PA)
3.      Arcuri (D-NY)
4.      Baca (D-CA)
5.      Baldwin (D-WI)
6.      Barrett (R-SC)
7.      Berry (D-AR)
8.      R. Bishop (R-UT)
9.      S. Bishop (D-GA)
10.  T. Bishop (D-NY)
11.  Boccieri (D-OH)
12.  Bonner (R-AL)
13.  Boswell (D-IA)
14.  Boucher (D-VA)
15.  Braley (D-IA) 
16.  H. Brown (R-SC)
17.  D. Burton (R-IN)
18.  Butterfield (D-NC)
19.  Buyer (R-IN)
20.  Carney (D-PA)
21.  Childers (D-MS)
22.  Coble (R-NC)
23.  Conyers (D-MI) 
24.  Costello (D-IL)
25.  Dahlkemper (D-PA)
26.  L. Davis (D-TN)
27.  DeFazio (D-OR)
28.  DeLauro (D-CT)
29.  Dingell (D-MI)
30.  Doggett (D-TX)
31.  Donnelly (D-IN)
32.  Doyle (D-PA)
33.  Ehlers (R-MI)
34.  Ellison (D-MN)
35.  Filner (D-CA)
36.  Foster (D-IL)
37.  Gerlach (R-PA)
38.  G. Green (D-TX)
39.  Grijalva (D-AZ)
40.  Halvorson (D-IL)
41.  Hare (D-IL)
42.  Heinrich (D-NM)
43.  Herseth Sandlin (D-SD)
44.  Higgins (D-NY)
45.  Hinchey (D-NY)
46.  Hodes (D-NH)
47.  Hoekstra (R-MI)
48.  Holden (D-PA)
49.  Holt (D-NJ)
50.  D. Hunter (R-CA)
51.  Inglis (R-SC)
52.  J. Jackson (D-IL)
53.  E.B. Johnson (D-TX)
54.  H. Johnson (D-GA)
55.  T. Johnson (R-IL) 
56.  W. Jones (R-NC)
57.  Kagen (D-WI)
58.  Kanjorski (D-PA)
59.  Kaptur (D-OH)
60.  Kildee (D-MI)
61.  Kilroy (D-OH)
62.  Kissell (D-NC)
63.  Kucinich (D-OH)  
64.  LaTourette (R-OH)
65.  B. Lee (D-CA) 
66.  C. Lee (R-NY)
67.  Lipinski (D-IL)
68.  Loebsack (D-IA)
69.  Lynch (D-MA)
70.  Mack (R-FL)
71.  Maffei (D-NY)
72.  Manzullo (R-IL)
73.  McCotter (R-MI)
74.  McGovern (D-MA)
75.  McHenry (R-NC)
76.  McIntyre (D-NC)
77.  Michaud (D-ME)
78.  B. Miller (D-NC)
79.  C. Miller (R-MI) 
80.  Mollohan (D-WV)
81.  C. Murphy (D-CT)
82.  P. Murphy (D-PA)
83.  T. Murphy (R-PA)
84.  Myrick (R-NC)
85.  Napolitano (D-CA)
86.  Olver (D-MA)
87.  Pascrell (D-NJ) 
88.  Perriello (D-VA)
89.  Peters (D-MI)
90.  Petri (R-WI)
91.  Pingree (D-ME)
92.  Pitts (R-PA)
93.  Platts (R-PA)
94.  Rahall (D-WV)
95.  Richardson (D-CA)
96.  H. Rogers (R-KY)
97.  M.D. Rogers (R-AL)
98.  M.J. Rogers (R-MI)
99.  Rohrabacher (R-CA)
100.          Rush (D-IL)
101.          T. Ryan (D-OH)
102.          Linda Sanchez (D-CA)
103.          Schakowsky (D-IL)
104.          Schauer (D-MI)
105.          Sensenbrenner (R-WI)
106.          Shea-Porter (D-NH)
107.          Sherman (D-CA)
108.          Shimkus (R-IL)
109.          Shuler (D-NC)
110.          Shuster (R-PA)
111.          Slaughter (D-NY)
112.          Souder (R-IN)
113.          Space (D-OH) 
114.          Spratt (D-SC)
115.          Stark (D-CA)   
116.          Stupak (D-MI)
117.          Sutton (D-OH)
118.          Taylor (D-MS)
119.          B. Thompson (D-MS)
120.          G. Thompson (R-PA) 
121.          Tonko (D-NY)
122.          M. Turner (R-OH)
123.          Upton (R-MI)
124.          Visclosky (D-IN)
125.          Walz (D-MN)
126.          Welch (D-VT)  
127.          Westmoreland (R-GA)
128.          C. Wilson (D-OH)
129.          J. Wilson (R-SC)
130.          Woolsey (D-CA)