US-China Trade Update: Chinese Currency Revaluation Occurs As Legislation
Is Introduced to Apply Anti-Subsidy Laws Against China
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On July 21, China revalued its currency 2.1 percent, changing the current
exchange rate from 8.3 to 8.11 per U.S. dollar. This is good news for U.S.
companies, as the revaluation will cause Chinese imports to become slightly
more expensive. Conversely, for U.S. exporters, a stronger Chinese Yuan
will make U.S. exports to China cheaper, leaving American companies the
option of lowering their prices or increasing profits by leaving prices
|“The shifting of the exchange
rate may provide U.S. importers of Chinese products some measure
of relief if U.S. lawmakers view the revaluation as a first step
in Chinese trade reform.”
The U.S. Congress has been considering trade sanctions against China
if such a revaluation did not occur. The shifting of the exchange rate may
provide U.S. importers of Chinese products some measure of relief if U.S.
lawmakers view the revaluation as a first step in Chinese trade reform.
However, while the revaluation of the Yuan is a step towards reducing
the threat of a trade war with China, the leadership of the House Ways and
Means Committee introduced legislation this week to allow the application
of U.S. anti-subsidy laws to imports from non-market economies such as China.
The bill also includes other trade provisions introduced in response to
growing congressional concerns over trade with China, including the creation
of a system to closely monitor China’s intellectual property rights and
market access. The bill also requires the administration to issue semi-annual
reports to Congress on China’s advancement in fulfilling those commitments.
Lastly, the bill authorizes an additional $6 million in funds for USTR and
tightens measures for collecting antidumping duties from shippers who posted
bonds and have since been unable to pay Customs.
Greenberg Traurig’s Global Trade Practice Group works with
importers and exporters to closely monitor how these new policies will
affect their business. For more information, please contact
Steve Mulder or
Pedro Pablo Permuy in
the Washington, DC office at 202.331.3100.
© 2005 Greenberg Traurig
For more information, please review our Global Trade Practice description,
or feel free to contact one of our attorneys.
This GT ALERT is issued for informational purposes only and is not intended
to be construed or used as general legal advice. Greenberg Traurig attorneys provide
practical, result-oriented strategies and solutions tailored to meet our clients’
individual legal needs.