US approves sanctions against China in ongoing currency dispute

AFP - A US Congress committee on Friday voted to open the way for retaliation against China over its currency, saying Beijing had failed to fulfill promises to let the yuan appreciate.
  
Charging that China was deliberately undervaluing the yuan to boost exports, the House Ways and Means Committee voted to expand the powers of the Commerce Department to allow it to impose tariffs due to currency manipulation.
  
Under longstanding regulations, the Commerce Department can only impose tariffs on foreign goods if the producer country directly subsidies an export.
  
The committee sent the bill to the full House, which is expected to vote on the measure in the coming weeks.
  
"China's exchange rate policy has a major impact on American businesses, and American jobs, which is what this is all about," said Representative Sandy Levin, a member of President Barack Obama's Democratic Party from economically struggling Michigan.
  
Levin, who chairs the Ways and Means Committee, which handles tax policy, said that the yuan's appreciation had been miniscule despite China's pledges in the face of pressure ahead of the Group of 20 summit in June.
  
"Additional measures are necessary, and that is why we are here today," Levin said.
  
But members of the minority Republican Party opposed the bill, accusing President Barack Obama's Democratic Party of seizing on the measure as a last-ditch political measure ahead of tough November 2 elections.
  
The House committee voted one day after Obama met in New York with Chinese Premier Wen Jiabao, devoting much of his two-hour meeting to the economy and insisting that Beijing needs to do more to revalue its yuan currency.
  
But Wen made clear in a speech this week that China was not ready to allow a drastic revaluation of its yuan, saying that Chinese companies risked going bankrupt if Beijing yields to US pressure.