China Currency Sanctions

The central bank of China maintains tight control on the international exchange-rate value of its currency, the yuan. Congressional critics of the policy argue that the Chinese intentionally undervalue the yuan to gain an advantage in international trade, artificially lowering the price of what it sells to Americans and raising the cost of what it buys. Even if those claims are accepted, imposing trade sanctions against imports from China would not necessarily cause the Chinese government to revalue its currency, and if it did, evidence is lacking that it would close the large U.S. bilateral trade deficit with China or stimulate the growth of U.S. manufacturing. Sanctions would more likely provoke Chinese retaliation against U.S. exports and raise costs for U.S. business and consumers that buy imports from China. Click to see more on China's currency and trade.

On September 29, 2010, the House voted 348-79 (Roll Call Vote 554) in favor of the Currency Reform for Fair Trade Act, which would allow the Commerce Department to impose tariffs on imports from China based on its "undervalued" currency.