US Senate passes legislation to target China's currency policy while China warns of potential 'trade war' between the countries; Putin in China for $7 billion trade talks; Australia's lower house passes carbon tax for nation's 500 biggest polluters; US accuses Iranians of plot to kill Saudi Arabian ambassador in Washington; Sudanese people hit streets of Khartoum to protest food prices; and more
Top of the Agenda: Senate Targets China's Currency Policy
The U.S. Senate passed legislation yesterday that would tax the goods of countries with "misaligned" currencies (WSJ). The bipartisan measure is meant to target China, a trading partner that the United States has routinely criticized for devaluing its currency. China warned that such a move could instigate a trade war (BBC) between the nations.
U.S. officials have argued that by holding down the yuan, China is able to keep its exports inexpensive for U.S. consumers, thus undermining the U.S. manufacturing sector. The measure has gained traction because of the perception that China's alleged unfair trade advantage (NYT) is allowing it to steal U.S. jobs, contributing to an already-bleak employment outlook.
However, leaders in the House of Representatives have voiced strong opposition (Politico) to the bill, indicating that it will likely not be taken up by legislators in that chamber. The White House has not taken an official stance, but has cautioned that the bill could be inconsistent with World Trade Organization rules.
This Independent Task Force report encourages the Obama administration and Congress to adopt a "pro-America" trade policy that brings to more Americans the benefits of global engagement.
The aftermath of the Great Depression saw a burst of competitive currency devaluations and protectionism that undermined confidence in an open global economy. As countries recover from the financial crisis today, they need to heed the lessons of the past and avoid the policies of the 1930s, writes Liaquat Ahamed in Foreign Affairs.
Sizeable trade and currency imbalances between China and the United States have fueled tensions over China's exchange-rate policies vis-à-vis the dollar and intensified debate over the proposed remedies to the problem, explains this CFR Backgrounder.
Putin in China for Bilateral Talks
Russian Prime Minister Vladimir Putin met with Chinese officials to advance a long-delayed gas deal that would see Russia pump fuel into China for thirty years. Over the course of Putin's two-day visit, the countries agreed on $7 billion in trade deals (AFP) in energy, finance, and agriculture.
AUSTRALIA: In a victory for Australian Prime Minister Julia Gillard, the lower house of parliament passed a carbon tax (Australian) that would require five hundred of the country's biggest polluters to pay for each ton of carbon dioxide they emit. The bill is expected to pass the upper house next month.