(Image source: Trade Newswire)

 

BY NICK ADAMS

You're watching multisource world video news analysis from Newsy.


Talks of a trade war surround the two most powerful nations in the world. A bill that would punish countries for undervaluing its currency is advancing in the U.S. Senate. PBS reports how this came about.

“A bill aimed at China’s currency cleared a sixty vote threshold this evening. The move comes as unemployment here in the U.S. remains high and jobs continue to go overseas.”

The New York Times says the would-be tariffs would be in retaliation to the belief that China is keeping its currency low, which ultimately gives it a price advantage. The Times reports the Chinese are not happy with the bill and...

“...urged senators to ‘rationally understand Sino-U.S. trade cooperation ... and stop pressuring China through domestic lawmaking.’”

China isn’t the only one wanting the U.S. to back off. Republican Speaker of the House John Boehner agrees. The Daily Caller reports Boehner has his own concerns about the currency in China but doesn’t think this is the way to fix it.

“I think it’s pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency.”

However dangerous it might be, some believe the bill won’t amount to anything.  Financial Times Blogger, Rob Minto says there is no need to worry about a trade war at this time.  Among many of his arguments, he says...

“Although the US presidential election makes issues like jobs politically sensitive, cooler heads may well prevail. There is a strong possibility that the bill will not go through Congress.”

But not everyone agrees. CNBC reports this is not just a threat by the United States that will end without consequence.  

“You know Scott, the threat of a trade war.  I think it’s very real.  And on the U.S. side it has bi-partisan support. Romney very interestingly is for trade sanctions against China, so I think that will happen.  We’re going to have trade strife with China.”

But if China’s state-run media is any indication -- China doesn’t appreciate being blamed for U.S. economic woes. An article from Xinhua reads...

“Critics argue that figures from the past 20 years show no link between China's exchange rate and the U.S. unemployment rate. Although the yuan has appreciated against the dollar by over 25 percent since 2005, the U.S. unemployment rate has nevertheless risen from about 7 percent to over 9 percent.”



Transcript by Newsy.