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Senate Passes China Currency Legislation Bill 63-35

Tyler Durden's picture




 

So while the US is setting the stage for a possible retaliation against Iranians hiring Mexicans to kill for them, because they obviously can't do it on their own, the US Senate has just passed the China currency legislation bill in a 63 to 35 vote, which in turn will do miracles for Sino-US foreign relations. According to the legislation, it would let companies seek duties to compensate for a weak Chinese yuan. However, as Goldman indicated first thing this morning, the probability of this bill actually being enacted in its current form, or any, is slim to nil: while the Bill is under review by Obama administration, John Boehner, has called it "dangerous." If only he had an idea... Full Goldman take can be found here.

From The Hill:

The Senate approved legislation that could lead to higher tariffs on Chinese imports in a 63-35 vote, with several Republicans voting with Democrats.

 

The vote poses an immediate quandary for House Republican leaders, who have so far dismissed the bill as a recipe for starting a trade war between the U.S. and China, just when the world is looking for the countries to work together to help maintain global economic growth.

 

It is also a headache for President Obama, who is cool to a bill that will complicate his administration’s work with China on an array of issues. Obama has also suggested that the bill, if passed, could run foul of international trade rules and lead to retaliatory tariffs on U.S. exports, hurting the businesses and workers the legislation is designed to protect.

 

The bill would require the U.S. to determine which countries' currencies are misaligned, and impose compensating duties on imports from those countries if this misalignment is not corrected. While not specifically aimed at China, the bill is seen as an answer to what most agree is an undervalued Chinese currency that makes it harder for U.S. companies to compete against relatively less expensive Chinese goods.

Naturally the Alliance for American Manufacturing was ecstatic by this development:

This evening, the U.S. Senate passed S.1619, the Currency Exchange Rate Oversight Act of 2011, a bill to address China’s ongoing currency manipulation, by a vote of 63-35. 

 

Said Alliance for American Manufacturing (AAM) Executive Director Scott Paul:

 

"The Senate's vote is a win for American jobs. A strong bipartisan majority has said to China: Stop the cheating on currency or face consequences. And more importantly, American manufacturers and their workers know that the Senate will guarantee a level playing field on currency so that we can export and successfully compete in the global marketplace.

 

"If S.1619 is signed into law, it will create good American jobs. But there is a long way to go. Speaker Boehner and President Obama appear to have concerns about this legislation.  Most trade lawyers who have reviewed the legislation believe it is in compliance with our international trade obligations.  The chances of a 'trade war' with China are about as likely as seeing a unicorn on the Capitol lawn.

 

"The choice is now clear for Speaker Boehner and President Obama: Will you side with the Beijing regime and outsourcers, or will you stand with American manufacturing? I find it hard to believe that Speaker Boehner would defy a majority of his own caucus and the House of Representatives to placate irrational threats from a communist government. I doubt President Obama wants to be outflanked on China by Mitt Romney or any other presidential candidate after criticizing President Bush on China trade in 2008.

 

"The passage of the currency bill in the Senate is also a major defeat for special interests. 16 Republican Senators defied the Club for Growth and voted with the strong majority of their constituents for this bill.

 

"We praise the leadership of Senators Sherrod Brown, Lindsey Graham, Chuck Schumer, and Jeff Sessions for authoring and securing passage of S.1619. We also thank Majority Leader Harry Reid for bringing the legislation to the floor and the 63 Senators who supported passage of S.1619 tonight."

We wonder what the AAM will think of this historic victory when that can of Folgers coffee at Wal Mart jumps by 100% in a few months, or when the government has to actually pay a real interest rate for those 10 Year bonds...

 

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Tue, 10/11/2011 - 18:44 | 1763210 mynhair
mynhair's picture

Let me guess:  all Dims and RINOs voted aye.

Tue, 10/11/2011 - 19:03 | 1763295 max2205
max2205's picture

Another law to be ignored and not enforced. Just like the others

Tue, 10/11/2011 - 19:16 | 1763356 dlmaniac
dlmaniac's picture

Senators believe they can bite the hand and still get fed.

 

Tue, 10/11/2011 - 20:28 | 1763609 Money 4 Nothing
Money 4 Nothing's picture

Two wings of the same bird, don't look at their Dem Repub alliance, look at their voting record.

Tue, 10/11/2011 - 22:28 | 1764111 dark pools of soros
dark pools of soros's picture

look for who buys their hookers and blow

Tue, 10/11/2011 - 18:45 | 1763211 supernova
supernova's picture

I love it that no politician mentions the truth: China manipulates our currency by buying our debt and financing our deficit.

Tue, 10/11/2011 - 18:45 | 1763214 jcaz
jcaz's picture

Great time for a turf war!

Tue, 10/11/2011 - 18:47 | 1763220 mynhair
mynhair's picture

Get your effing dog off my lawn!

Tue, 10/11/2011 - 19:36 | 1763444 Arkadaba
Arkadaba's picture

My dad is bigger than your dad!

Tue, 10/11/2011 - 18:46 | 1763218 SilverIsKing
SilverIsKing's picture

One stipulation though...

All compensation must fit inside a fortune cookie.

Tue, 10/11/2011 - 18:49 | 1763229 mynhair
mynhair's picture

Thorium?

Tue, 10/11/2011 - 18:47 | 1763222 carbonmutant
carbonmutant's picture

So what's the message...?

Tue, 10/11/2011 - 20:06 | 1763542 BurningFuld
BurningFuld's picture

It suddenly becomes clear why all the Chinese are buying property in Vancouver.

Tue, 10/11/2011 - 20:19 | 1763577 Cabreado
Cabreado's picture

Hubris + Influence + Ignorance = Turmoil

Tue, 10/11/2011 - 18:48 | 1763225 nmewn
nmewn's picture

With some cross overs by the count.

Attention Walmart shoppers ;-)

Tue, 10/11/2011 - 18:48 | 1763226 Western
Western's picture

There's no evidence that a rising yuan will lead to a bilateral trade deficit.

Tue, 10/11/2011 - 18:49 | 1763228 Id fight Gandhi
Id fight Gandhi's picture

Close the ports down, ship all the shit back to china. Fuck em.

Americans can even make a plastic cup or a nail anymore. Some chinaman has to do it.

Tue, 10/11/2011 - 18:50 | 1763235 mynhair
mynhair's picture

Fergot a 't'.  F for effort.

Tue, 10/11/2011 - 19:04 | 1763303 Dumb Honkie
Dumb Honkie's picture

You sound like a stupid HONKIE mother fucker. go home fuck your ugly mama.

Wed, 10/12/2011 - 05:27 | 1764801 Freewheelin Franklin
Freewheelin Franklin's picture

Comparative advantage, what is it?

Tue, 10/11/2011 - 18:50 | 1763230 Alvaro de Esteban
Alvaro de Esteban's picture

When goods do not cross borders, soldiers will.”
? Frédéric Bastiat

“Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.”
? Frédéric Bastiat
Tue, 10/11/2011 - 18:50 | 1763231 Clint Liquor
Clint Liquor's picture

The Swiss devalued their currency by 10% in an hour and China is a currency manipulator?

Tue, 10/11/2011 - 18:51 | 1763241 mynhair
mynhair's picture

Trump the Chump sez so, so it must be true.

Tue, 10/11/2011 - 19:11 | 1763325 legal eagle
legal eagle's picture

Check mate.

Tue, 10/11/2011 - 18:50 | 1763233 PaperBear
PaperBear's picture

KABOOM.

Another volley in the currency war.

Tue, 10/11/2011 - 18:51 | 1763236 Comay Mierda
Comay Mierda's picture

cue treasury dump in 3... 2... 1...

Tue, 10/11/2011 - 18:52 | 1763237 depression
depression's picture

We just mad cuz China quit buying our worthless Treasury debt and are buying up all the Gold, Silver and rare earth metals on the planet.

Tue, 10/11/2011 - 18:53 | 1763245 mynhair
mynhair's picture

Slight correction:  mines, as well as physical.

Tue, 10/11/2011 - 19:46 | 1763478 Arkadaba
Arkadaba's picture

And oil and gas at least in Canada. Most Canadians are not aware of the buying spree that is going on but they should be:

http://business.financialpost.com/2011/10/11/china-buying-while-we-talk/

Tue, 10/11/2011 - 18:57 | 1763267 Clint Liquor
Clint Liquor's picture

We don't need China to buy Treasury debt, we have the FED for that.

Tue, 10/11/2011 - 19:01 | 1763289 nmewn
nmewn's picture

Go with the enemy ya know right...lol.

Tue, 10/11/2011 - 19:02 | 1763293 knukles
knukles's picture

Yeah, we can be self-sustaining like them Japaneses.

Tue, 10/11/2011 - 19:29 | 1763413 LongBalls
LongBalls's picture

Your right. The FED will step in and buy the surplus at T Bill debt auctions if China continues to slow the pace. Probably from the Camen Islands. This looks good to the sheeple but the elite will be furious at their loosening grip on China. The another peice of the chess game has been moved into position.

Tue, 10/11/2011 - 19:52 | 1763497 Alpha Monkey
Alpha Monkey's picture

I think you mean "Go" game.

Tue, 10/11/2011 - 18:53 | 1763246 swissaustrian
swissaustrian's picture

So Chinese goods will be more expensive for US consumers as a consequence of that.

Looking forward to the next CPI.

Tue, 10/11/2011 - 18:57 | 1763262 Rainman
Rainman's picture

Idiots.....I always wanted to punch teacher in the nose too. A giant fuck up is born.

Tue, 10/11/2011 - 18:57 | 1763263 nwskii
nwskii's picture

no wonder they dont let anyone into fort knox

Tue, 10/11/2011 - 19:02 | 1763272 mynhair
mynhair's picture

And the EURUSD could care less.

Kinda like me about that Reid critter.

Tue, 10/11/2011 - 18:59 | 1763278 chump666
chump666's picture

No problems.  Shanghai collapses last session after huge government intervention, China implodes they then buy up USD's and re-peg the Yuan to the USD.  Trade war ahead and a big one.

then watch US company profits (offshore operations ala China) start to slide into nothing.

Tue, 10/11/2011 - 19:03 | 1763298 buzzsaw99
buzzsaw99's picture

Time to buy "B" shares. emerging. markets. bitchez.

Tue, 10/11/2011 - 19:07 | 1763311 mynhair
mynhair's picture

I prefer TAP shares.  Don't like generic beer shares.

(Yes, shares DO come in cans, plus, you wind up with kicking material.)

Tue, 10/11/2011 - 19:32 | 1763430 buzzsaw99
buzzsaw99's picture

Humor. :Excellent!: [/Mr. Burns]

 

Tue, 10/11/2011 - 19:03 | 1763299 FreudianSlip
FreudianSlip's picture

Like all other 3rd world countries (which keeps them 3rd world), place triple import taxes onto anything coming into the country.  Let's start with China and then expand it to every other country to stop all imports into US.  That should slow down things to a backward crawl as we have little industrial manufacturing to create anything to sell to ourselves, let alone export.

 

Hey...we could export illegal aliens and entitlement recipients...we've produced lots of those lately.

 

Anyone considered quit expanding fascist government and insane spending that produces nothing?

 

Hummm, guess they missed Critical Thinking Classes at Harvard.

Tue, 10/11/2011 - 22:09 | 1764042 bsdetector
bsdetector's picture

We have been exporting illegal aliens; they are in the form of college grads that have used our education system to gain knowledge to bring home to their own people. And our colleges got paid for the making those graduates.   

Tue, 10/11/2011 - 19:07 | 1763315 Stack Trace
Stack Trace's picture

Bring the trade war on. Time to force a reset on our banana republic and our endless bleeding of our ability to create wealth for ourselves. So what if junk from China costs 2X more...we can just make the junk ourselves and pay ourselves for it.

Tue, 10/11/2011 - 20:43 | 1763633 Money 4 Nothing
Money 4 Nothing's picture

Nooot a good idea when Russia will be the paymaster for China. Not good. Now, they will not be able to sell American goods in China becasue there will be cheaper alternatives there. Soo, we buy all their shit now becoming more expensive and we can't sell anything to them cause nobody will want it. Real nice dumb fuckers. That should really make some jobs here.

 

China is a currency manipulator? Were the worst ones of them all!

 This Country is totally fucked now, watch what happens.

III

Tue, 10/11/2011 - 19:09 | 1763319 mynhair
mynhair's picture

This could hurt Tsing Tao sales.....

Tue, 10/11/2011 - 19:10 | 1763323 knukles
knukles's picture

ROOT FOR THE FUCKING DEPRESSION!

Fed's all outa ammo.
Fiscal stimuli turns neutral/contractionary
Fucking Trade Wars

All Hail Smoot Hawley!
In Smoot Hawley We Trust

Root for the Fucking Bead Lines!

 

Tue, 10/11/2011 - 19:13 | 1763327 mynhair
mynhair's picture

Have no beads left; bought Manhattan with them.

Guess I better get in line.....

Tue, 10/11/2011 - 19:14 | 1763341 BernankeHasHemo...
BernankeHasHemorrhoids's picture

We need to go further, much further:

1. A complete embargo on Chinese goods imported to the US. Kill Wal-mart and destroy China's economy. We can live without their crap - they can't live without their jobs.

2. Repudiate all US debt held in Chinese hands. Wipe your asses with it, bitches!

Tue, 10/11/2011 - 19:44 | 1763477 Dumb Honkie
Dumb Honkie's picture

Another dumb HONKIE SHITBAG spewing out a lot of shit from his big mouth.

Tue, 10/11/2011 - 19:19 | 1763370 bbq on whitehou...
bbq on whitehouse lawn's picture

Fine pass the bill, lock down the boaders nothing in or out. Maybe the world will be a better place if the rest of the world stopped doing business with the US.

Just ignored us.

Like the kid that takes his ball and bat and goes home. Fine we will use a bottla cap and a broomstick and be better ball players because of it.

Really at this point who will even care.

The US can be as crazy as it wants and the rest of the world can be as crazy as they can stand.

Tue, 10/11/2011 - 19:28 | 1763406 mynhair
mynhair's picture

In other useless news:

Obama Kills Jobs bill vote waiting for some nimrod to fly in.

Tue, 10/11/2011 - 23:33 | 1764331 UP Forester
UP Forester's picture

"It's a bird!  It's a plane!

"NO, IT'S HELICOPTER BEN!"

Tue, 10/11/2011 - 19:29 | 1763418 jstalin
jstalin's picture

Those advocating protectionism on here have obviously never lived in a protectionist country -- where every consumer good is utter and complete shit quality and the economy is no better. Do you people have even the slightest clue beyond what the boobtube tells you?

 

You know what really makes me laugh? My local newspaper recently ran a story about local farmers facing a labor shortage... in the state with the highest unemployment rate in the nation. Yeah, those illegals and Chinese are TAKING OUR JOBS! OUR JOBS!!!!

 

lol.

Tue, 10/11/2011 - 20:21 | 1763586 machineh
machineh's picture

In protectionist countries, Chinese goods are the HIGH END stuff -- when you can get them!

Ever bought bath towels that feel like sandpaper? Shoes that fall apart in a week? Electronics at double the world price? Lay on some heavy tariffs, and you'll see for yourself.

Chuck-the-Schmuck Schumer is a rare human being: dumber than fucking Kurgman.

Tue, 10/11/2011 - 20:35 | 1763639 ForTheWorld
ForTheWorld's picture

This sort of ties in with what Marc Faber was saying about people needing to take pay cuts and save more (how those two can function together I'm not really sure when prices are also rising). The US people would rather accept handouts from the government rather than work hard. My wifes family are notorious for it.

I've worked on farms and construction sites to get by (there was no other work), as well as working as a database administrator (which is my current career path). I honestly find the work outdoors more rewarding, and as such, I'm planning to buy some land and start my own farm in the near future.

If only more people felt the need to be productive, rather than simply consume.

Tue, 10/11/2011 - 19:54 | 1763498 razorthin
razorthin's picture

I hope China dumps every last TBill.

Tue, 10/11/2011 - 20:27 | 1763605 Buck Johnson
Buck Johnson's picture

Whoever came up with this bill has no idea what they may have unleashed.  It seems that our politicians and business leaders only care about their own self interest, nothing more.

Tue, 10/11/2011 - 20:31 | 1763619 ziggy59
ziggy59's picture

I soon expect a unicorn on the capital lawn...

Tue, 10/11/2011 - 22:45 | 1764191 StychoKiller
StychoKiller's picture

Mmm, freshly-pooped skittles! :>D

Tue, 10/11/2011 - 20:40 | 1763662 Justaman
Justaman's picture

An orderly and orchestrated decimation in the value of our currency over the decades has forced us to lever and become a non-factor in global competition.  So, it is time to announce a new rule that erases liability: if you can't compete, blame the other guy. 

Tue, 10/11/2011 - 20:40 | 1763663 JustACitizen
JustACitizen's picture

No one should be confused by this. This is just political cover for the passage of the "new" free trade bills. It will come to pass...we will have new free trade bills and the currency crap will be vetoed/stalled etc.

Tue, 10/11/2011 - 21:28 | 1763849 Edward Fiatski
Edward Fiatski's picture

Deja vu, gentlemen.

You want to know what happens next? You know what happens next.

1939-1945.

It has all happened before, it will all happen again... ONE LAST TIME, till all of the Entities are exhausted from such activities, thus rendering National Sovereignty - OBSOLETE.

It will be a beautiful world, gentlemen. :)

Wed, 10/12/2011 - 00:26 | 1764465 xtop23
xtop23's picture

Obama and the democratic half of our idiotic government are salivating on the possible passage of this bill. Theyre just not sure they can withstand the international fallout if it does.

Just think of all the new bureaucrats they can employ and regulations they can pass to monitor its implementation !!!

And all the kickbacks from domestic businesses that they can get their fingers on.

And the subsequent increase in poll numbers from idiotic Americans that want a chest-bump at China's expense even if it means shooting themselves in the face.

 

 

 

 

Wed, 10/12/2011 - 01:53 | 1764594 palmereldritch
palmereldritch's picture

"So while the US is setting the stage for a possible retaliation against Iranians hiring Mexicans to kill for them, because they obviously can't do it on their own.."

Wow. And just as Holder is about to receive a subpoena for the Fast and Furious investigation he announces the circus is in town...the Mexican-Iranian Halloween version.... [Count Floyd]  "Scary kids!"

http://www.foxnews.com/politics/2011/10/11/congressional-investigators-t...

 

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