I 
108TH CONGRESS 
1ST SESSION H. R. 3058
To require the Secretary of the Treasury to analyze and report on the 
exchange rate policies of the People’s Republic of China, and to require 
that additional tariffs be imposed on products of that country on the 
basis of the rate of manipulation by that country of the rate of exchange 
between the currency of that country and the United States dollar. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 10, 2003
Mr. ENGLISH (for himself, Mr. BALLENGER, Mr. GREEN of Wisconsin, Mr. 
REYNOLDS, Mr. SENSENBRENNER, Mr. HUNTER, Mrs. MYRICK, Mr. 
BURR, Mr. COBLE, Mr. GILLMOR, Mr. SOUDER, Mr. TAYLOR of North 
Carolina, Mr. GREENWOOD, Mr. HAYES, Mr. HOEKSTRA, Mr. COLLINS, 
Mr. ROHRABACHER, Mr. EVERETT, Mr. PLATTS, Mr. GALLEGLY, Mr. 
GOODE, Mr. PETERSON of Pennsylvania, Mr. DUNCAN, Mr. MURPHY, 
Mr. WILSON of South Carolina, Mr. OTTER, Mr. JONES of North Caro-
lina, Mr. UPTON, Mr. BROWN of South Carolina, Mr. SHUSTER, Mr. 
BARRETT of South Carolina, Mr. LEWIS of Kentucky, Mr. WALSH, Mr. 
NORWOOD, Mr. SHAW, Mr. TERRY, and Mr. BISHOP of Utah) introduced 
the following bill; which was referred to the Committee on Ways and 
Means 
A BILL 
To require the Secretary of the Treasury to analyze and 
report on the exchange rate policies of the People’s Re-
public of China, and to require that additional tariffs 
be imposed on products of that country on the basis 
of the rate of manipulation by that country of the rate 
of exchange between the currency of that country and 
the United States dollar.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Currency Harmoni-
zation Initiative through Neutralizing Action Act of 
2003’’. 
SEC. 2. FINDINGS. 
(a) FINDINGS.—The Congress finds as follows: 
(1) The benefit of trade concessions can be ad-
versely affected by misalignments in currency. 
(2) Misalignments in currency caused by gov-
ernment policies intended to maintain an unfair 
trade advantage nullify and impair trade conces-
sions. 
(3) Under article XV of the GATT 1994, a 
country is considered to be manipulating its cur-
rency to obtain an unfair trade advantage if—
(A) its currency manipulation has a sub-
sidy-like effect; 
(B) its currency manipulation constitutes a 
nullification and impairment of the benefits of 
the GATT 1994; or 
(C) its currency manipulation results in a 
contravention of the intention of the GATT 
1994.
(4) The International Monetary Fund also pro-
hibits the use of currency manipulation as a method 
of gaining unfair trade advantage. The International 
Monetary Fund defines such manipulation as large-
scale and protracted intervention in one direction to 
gain an unfair trade advantage. 
(5) Sections 301 through 309 of the Trade Act 
of 1974 contain the authority under United States 
law to take retaliatory action, including import re-
strictions, to enforce the rights of the United States 
against any unjustifiable, unreasonable, or discrimi-
natory practice or policy of a country that burdens 
or restricts United States commerce. 
(6) In 2002, the United States trade deficit 
with the People’s Republic of China exceeded 
$103,000,000,000, the largest bilateral trade deficit 
in the world. Based on the first four months of 
2003, the United States trade deficit with the Peo-
ple’s Republic of China is estimated to reach more 
than $120,000,000,000 in 2003. 
(7) United States imports from the People’s 
Republic of China have been growing at more than 
twice the rate of United States exports to that coun-
try.
(8) The People’s Republic of China is accumu-
lating foreign currency reserves, mostly United 
States 
dollars, 
at 
a 
rate 
of 
more 
than 
$6,000,000,000 per month; this intervention has 
kept the Chinese renminbi (RMB) from appreciating 
despite large trade surpluses and investment flows. 
China’s total foreign currency reserves currently 
stand at almost $300,000,000,000. 
(9) The People’s Republic of China has kept its 
currency pegged at approximately 8.3 RMB to the 
dollar since 1994. 
(10) The large and growing trade surplus of the 
People’s Republic of China with the United States 
strongly suggests that the RMB is undervalued 
against the dollar. Recently, economists have esti-
mated that the RMB is undervalued against the 
United States dollar by as much as 40 percent. 
(11) Import tariffs of the People’s Republic of 
China currently average about 15 percent. Assuming 
the recent estimates of Chinese RMB undervaluation 
against the dollar are correct, the effect of a free 
and open currency market would be more than twice 
as large as the effect of eliminating every tariff that 
the People’s Republic of China imposes on United 
States goods.
(12) In the long run, revaluation of the RMB 
by the Government of the People’s Republic of 
China would mitigate the ever increasing United 
States trade deficit with that country. 
(13) The President should formally initiate ac-
tion against the People’s Republic of China, on ac-
count of the manipulation of its currency, pursuant 
to article XV of the GATT 1994, the rules of the 
International Monetary Fund, and sections 301 
through 309 of the Trade Act of 1974. 
(b) DEFINITION.—In this section the term ‘‘GATT 
1994’’ has the meaning given that term in section 2 of 
the Uruguay Round Agreements Act (19 U.S.C. 3501). 
SEC. 3. ANALYSIS OF AND REPORT ON EXCHANGE RATE 
POLICIES OF CHINA. 
(a) ANALYSIS.—The Secretary of the Treasury shall, 
upon the enactment of this Act and annually thereafter, 
analyze the exchange rate policies of the People’s Republic 
of China in order to determine whether that country ma-
nipulates the rate of exchange between the currency of 
that country and the United States dollar for purposes 
of preventing effective balance of payments adjustments 
or gaining an unfair competitive advantage in inter-
national trade.
(b) COMPUTATION OF RATE OF MANIPULATION.—If 
the Secretary of the Treasury makes an affirmative deter-
mination under subsection (a), the Secretary shall com-
pute the rate of manipulation against the dollar in the 
form of a percentage. 
(c) REPORTS TO CONGRESS.—The Secretary of the 
Treasury shall submit to the Committee on Ways and 
Means of the House of Representatives and to the Com-
mittee on Finance of the Senate a report on the Sec-
retary’s analysis and findings under subsection (a), and 
any rate computed under subsection (b). The report shall 
be submitted—
(1) with respect to the analysis conducted upon 
the enactment of this Act, not later than 60 days 
after the date of the enactment of this Act; and 
(2) with respect to each subsequent analysis, at 
the end of each 1-year period thereafter. 
SEC. 4. ADDITIONAL TARIFFS. 
(a) ADDITIONAL TARIFF.—In any case in which a re-
port of the Secretary of the Treasury submitted under sec-
tion 3(c) includes a rate of manipulation under section 
3(b), the Secretary shall, not later than 30 days after the 
report is submitted, impose on all products of China that 
enter the customs territory of the United States, in addi-
tion to any duty that otherwise applies, a tariff equal to
the applicable percentage of the appraised value of the 
product at the time of entry. For purposes of this sub-
section, the ‘‘applicable percentage’’ is the percentage 
equal to the rate of manipulation. 
(b) ANNUAL MODIFICATION.—Any tariff imposed 
under subsection (a) shall be modified annually to the ex-
tent necessary to comply with the most recent report of 
the Secretary of the Treasury under section 3(c).
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