China Currency Bill

Dictionary Says

Definition of 'China Currency Bill'

A potential law passed in September 2011 by the U.S. Senate that would add tariffs to countries - most notably China - found to be undervaluing their currency. The China currency bill's intent is to make imports more expensive from these countries, evening the trade deficit and decreasing the countries' unfair economic advantage. It is a controversial bill because China holds enormous economic clout, as it's one of the U.S.'s top trading partners, and also holds a lot of U.S. debt.
Investopedia Says

Investopedia explains 'China Currency Bill'

There is fear that if the China currency bill passes the House and becomes law, China will respond in kind and spark a trading war with the U.S. and cause another recession. The belief is that if countries, such as China, that artificially peg their currency to the U.S. dollar were to let their currency freely float on the foreign exchange market, their currency would appreciate to reflect their growing economy, making labor and the cost of goods more expensive to import. This would help stem the loss of jobs to countries where production is cheaper.

Articles Of Interest

  1. Why China's Currency Tangos With The USD

  2. The Basics Of Tariffs And Trade Barriers

  3. The Pros And Cons Of A Pegged Exchange Rate

  4. Twin Deficits: Twice The Fun For The U.S

  5. In Praise Of Trade Deficits

  6. Exploring The Current Account In The Balance Of Payments

  7. What Is The Balance Of Payments?

  8. The U.S. National Spending And Debt

    We are looking at what could be the official year of the Federal Budget, or, more specifically, our debt and how we will manage it for many years to come.
  9. Austerity: When The Government Tightens Its Belt

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