H.R. 2378, otherwise known as the Currency Reform for Fair Trade Act (an amendment to the Tariff Act of 1930) is still in debate in the U.S. Senate. First introduced in May of 2009, the bill is an attempt to counter foreign countries like China who are devaluing their currency as much as 40% in order to gain an unfair trading advantage. In September 2010 the bill was passed in the House, but since its introduction in the Senate in late September, it has only been referred to the Committee of Finance, where it is now, almost 3 months later..
While the Senate has been considering the bill, much support has been found for the bill in order to help a struggling economy. Most recently, the National Textile Association (NTA) sent a petition to Congress expressing the immediate need for the passage of this bill. Because of companies like China that undervalue their currency, the NTA is urging the Senate to use this bill to counteract the destructive intentions of foreign trading partners. They argue that H.R. 2378 fights against this currency issue in “a pro-jobs, pro-growth, and pro-investment fashion.” The petition sent along with the letter includes more than 200 organizations and businesses, including the American Federation of Labor and the National Farmers Union.
On a local level, Michigan lawmakers have been fighting for the passage of this bill as well. Congressman Dale Kildee spoke to the House of Representatives in late September to help its passage through the House. Kildee was an original sponsor of this bill, along with Senator Debbie Stabenow. Stabenow has continued to fight for the Currency Reform for Fair Trade Act while also introducing new legislation that includes provisions from her original Fair Trade Act. In March of this year Stabenow introduced the Currency Exchange Rate Oversight Reform Act, which acts in a similar action to ensure that the U.S. Departments of Treasury and Commerce is protecting American businesses from unfair foreign competition. Stabenow has long been a proponent for penalizing countries with undervalued currency and feels that the Currency Exchange Rate Oversight Reform Act, along with the Currency Reform for Fair Trade Act is a good way to ensure that U.S. businesses are able to rise to their potential.
Michigan could stand to gain a lot through the passage of H.R. 2378 because its companies are put at such a disadvantage when China and other countries undervalue the dollar. With the expansion of such countervailing subsidies, many Michigan businesses are hoping that their products and services would be placed on a more even level. This bill could have great implications for the state of Michigan, but until then, the state will just have to wait for its passage in the Senate.