A bill targeting Chinese imports that is waiting for President Barack Obama’s signature violates international law, according to the Chinese commerce minister, and the country will not adjust its currency to fix a problem that belongs to the U.S. alone.
Reuters reported Wednesday that Chen Deming was critical of the trade bill, which would allow trade duties to be imposed on subsidized goods from China and Vietnam. He also said that the trade imbalance was Washington’s problem and that China would take no steps to affect it.
Chen was reported saying, “We follow the rules of the WTO, but we have no obligation to follow domestic laws or regulations in any specific country that go beyond international rules.”
The bill, passed Tuesday, followed a U.S. court ruling in December that said the U.S. Commerce Department did not have authority to impose countervailing (anti-subsidy) duties on goods from “non-market economies.”
Chen also struck back at U.S. criticism of China. “The U.S. government had subsidized its companies, like the three big automakers … but China did not criticize these moves or start massive countervailing actions against such moves,” he said in the report, and added that the exchange rate for the yuan is close to its fair value.
He was quoted saying, “I have noticed that the U.S. trade representative and treasury secretary have noted to the Congress that they would use the meeting, as well as other events, to push forward yuan reform,” referring to a scheduled meeting of the World Trade Organization Working Group on Trade, Debt and Finance to discuss the relationship between exchange rates and trade.
Chen added, “When I heard about this, I thought I heard wrong. They should push the U.S. dollar reform since the U.S. trade deficit is about 4.8% [of GDP] … China believes all countries should maintain the basic stability of their exchange rates, against the background of global financial crisis. Any country’s measures to devalue its own currencies or force other countries’ currencies to appreciate is not appropriate.”