An American political odd couple is leading a charge to crack down on what critics see as China's unfair trade practices.
Opposites in politics and personal style, Republican Senator Lindsey Graham and Democratic Senator Charles Schumer share the view that China manipulates the value of its currency which gives its exports a competitive edge and threatens American jobs and U.S. economic clout.
"China is too big and too powerful to be allowed to do this," said Graham, a soft-spoken South Carolina conservative.
"Everyone is fed up," said Schumer, a fast-talking New York liberal. "The time is right to do something about this."
Considered among the Senate's most respected and hardest-working members, the two are on the same page in seeking to protect U.S. manufacturing jobs in their respective states and across the country, a rising concern in an election year when unemployment is running at 9.7 percent.
Joined by more than a dozen Senate colleagues from both sides of the political aisle, Graham and Schumer offered legislation this week that threatens China with tariffs on some of its exports if it fails to let its currency rise in value.
In doing so, they aim to pressure the Obama administration to carry out a campaign promise and brand Beijing a currency manipulator, which would lead to increased pressure on China.
"Previous administrations haven't done the job. We trying to wake up this administration," said Schumer.
Said Graham: "China needs us as much as we need them. The only way you can have a good, honest and fair trading relationship is to speak the truth to each other."
China on Wednesday rejected charges of currency manipulation and said Graham, Schumer and other lawmakers were seeking to make Beijing an election-year "scapegoat" for U.S. fiscal woes.
Many U.S. lawmakers, backed up by economists, believe the yuan is undervalued by at least 25 percent. Dominique Strauss-Kahn, the managing director of the International Monetary Fund, has added to the pressure on Beijing by saying it is undervalued.
Graham and Schumer have been trying for years to correct this, having first introduced legislation in 2005 that threatened to slap a 27.5 percent tariff on Beijing's exports to the United States.
Frustration over yuan/dollar rate
The bill didn't become law, but it was seen as a warning, one that helped prompt China to raise the value of its currency by 21 percent during the next few years.
But since mid-2008, China has intervened in the currency markets almost daily to keep the yuan from rising against the dollar to cushion its exporters from the global financial crisis.
Graham and Schumer went to China together in 2006 to voice their concerns about China's currency. "It was very cordial. The Chinese listened, but they didn't necessarily agree," a Graham aide said.
Joanne Thornton of Concept Capital, a private firm that tracks Congress for institutional investors, said, "Election year politics, tough economic times and war of words between Washington and Beijing are bringing frustration over the yuan/dollar exchange rate to a boil on Capitol Hill."
Thornton called Schumer and Graham "a very credible team," and said, "I think their bill will get a lot of support. But I question if there will be enough for passage."
Thornton said she expected U.S. lawmakers to be leery about imposing tariffs on China and predicted Beijing "will resume modest exchange rate reform" to strengthen its own economy, which, in turn, could ease pressure from Graham, Schumer and others.
Schumer, a member of the Democratic leadership, preaches bipartisanship in the often-gridlocked Senate and hasn't been shy to criticize fellow Democrat Obama on China's currency policies.
Graham has drawn the wrath of some Republicans for working with Democrats, particularly Senator John Kerry, a former U.S. presidential nominee, on legislation to curb climate change.
He is also teaming up with Schumer to try to craft legislation to revamp the U.S. immigration laws.
"We have found a comfort level working with each other on hard problems where you have to have give and take," said Graham. "I think we make a pretty good team."
Schumer said years ago he and Graham were somewhat "lone voices" in warning against Chinese currency manipulation. "No more. Everyone knows that China is stonewalling."
