I 

109TH CONGRESS 

1ST SESSION H. R. 1575 

To authorize appropriate action if the negotiations with the People’s Republic 

of China regarding China’s undervalued currency and currency manipulation are not successful. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 12, 2005 

Mrs. MYRICK (for herself and Mr. SPRATT) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL 

To authorize appropriate action if the negotiations with the 

People’s Republic of China regarding China’s undervalued currency and currency manipulation are not successful. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. FINDINGS. 

4 Congress makes the following findings: 

5 (1) The currency of the People’s Republic of 

6 China, the yuan, is artificially pegged at a level sig7 nificantly below its market value. Economists esti-
2 

•HR 1575 IH 

1 mate the yuan to be undervalued by between 15 per2 cent and 40 percent or an average of 27.5 percent. 

3 (2) The undervaluation of the yuan makes ex4 ports from the People’s Republic of China less ex5 pensive for foreign consumers and makes foreign 

6 products more expensive for Chinese consumers. The 

7 effective result is a significant subsidization of Chi8 na’s exports and a virtual tariff on foreign imports, 

9 leading the People’s Republic of China to enjoy sig10 nificant trade surpluses with its international trad11 ing partners. The United States trade deficit with 

12 China has widened from $83,800,000,000 in 2000 

13 to $162,000,000,000 in 2004, resulting in an aggre14 gate deficit with China of more than 

15 $555,900,000,000 for that 5-year period. 

16 (3) China’s undervalued currency and the 

17 United States trade deficit with the People’s Repub18 lic of China is contributing to significant United 

19 States job losses and harming United States busi20 nesses. In particular, the United States manufac21 turing sector has lost more than 1,376,000 jobs 

22 since January 2001. 

23 (4) The Government of the People’s Republic of 

24 China has intervened in the foreign exchange mar25 kets to hold the value of the yuan within an artificial 
3 

•HR 1575 IH 

1 trading range. China’s foreign reserves are estimated 

2 to be more than $609,900,000,000 as of the end of 

3 2004, and have increased at a level higher than that 

4 of any other country. 

5 (5) China’s undervalued currency and the Chi6 nese Government’s intervention in the value of its 

7 currency violates the spirit and letter of the world 

8 trading system of which the People’s Republic of 

9 China is now a member. 

10 (6) The Government of the People’s Republic of 

11 China has failed to promptly address concerns raised 

12 by the United States and the international commu13 nity regarding the value of its currency. 

14 (7) Article XXI of the GATT 1994 (as defined 

15 in section 2(1)(B) of the Uruguay Round Agree16 ments Act (19 U.S.C. 3501(1)(B)) allows a member 

17 of the World Trade Organization to take any action 

18 which it considers necessary for the protection of its 

19 essential security interests. Protecting the United 

20 States manufacturing sector is essential to the secu21 rity interests of the United States. 
4 

•HR 1575 IH 

1 SEC. 2. NEGOTIATIONS AND CERTIFICATION REGARDING 

2 THE CURRENCY VALUATION POLICY OF THE 

3 PEOPLE’S REPUBLIC OF CHINA. 

4 (a) IN GENERAL.—Notwithstanding the provisions of 

5 title I of Public Law 106–286 (19 U.S.C. 2431 note), on 

6 and after the date that is 180 days after the date of enact7 ment of this Act, unless a certification described in sub8 section (b) has been made to Congress, there shall be im9 posed a rate of duty of 27.5 percent ad valorem on any 

10 article that is the growth, product, or manufacture of the 

11 People’s Republic of China and is imported directly or in12 directly into the United States, in addition to any other 

13 duty that would otherwise apply to such article. 

14 (b) CERTIFICATION.—The certification described in 

15 this subsection means a certification by the President to 

16 Congress that the People’s Republic of China is no longer 

17 manipulating the rate of exchange between its currency 

18 and the United States dollar for purposes of preventing 

19 an effective balance of payments and gaining an unfair 

20 competitive advantage in international trade. The certifi21 cation shall also include a determination that the currency 

22 of the People’s Republic of China is valued in accordance 

23 with accepted market-based trading policies. 

24 (c) NEGOTIATIONS.—Beginning on the date of enact25 ment of this Act, the Secretary of the Treasury, in con26 sultation with the United States Trade Representative, 
5 

•HR 1575 IH 

1 shall begin negotiations with the People’s Republic of 

2 China to ensure that the People’s Republic of China 

3 adopts a process that leads to a market-based system of 

4 currency valuation. 

Æ