Sen. Charles E. Schumer said Thursday he may again delay asking the Senate to vote on legislation imposing a 27.5 percent tariff on Chinese imports as a reprisal for China's undervaluing its currency.
Many authorities believe China undervalues its yuan up to 40 percent lower than it would be if the currency floated at market levels. This makes China's products artificially cheaper in the U.S., and is a key factor in the loss of good-paying jobs in the U.S.
"I'm more optimistic than I was when I got on the plane for China last Friday" about the regime's willingness to let its currency float at market rates.
Schumer, D-N.Y., and Republican Sens. Lindsey Graham of South Carolina and Tom Coburn of Oklahoma are visiting Chinese government and business officials in Beijing, Shanghai and Hong Kong.
In a conference call with reporters, Schumer said he and Graham, a co-sponsor of the bill, will decide next week whether to ask for a vote on the bill when it is scheduled to come to the floor March 31.
Schumer said his meetings with officials persuade him that Chinese leaders may realize that keeping its currency artificially undervalued may not be in the regime's long term interests.
Factored into his decision, Schumer said, will be what happens in meetings between the senators and Treasury Secretary John Snow. He said Snow must formally rule by April 20 whether China is a "currency manipulator" under international trading agreements.
If Snow rules against China, the the World Trading Organization and the International Monetary Fund could take up the issue and impose penalties on China.
Last year, Schumer and Graham asked the Senate for a test vote on their bill and it passed 67-33. Schumer said Thursday it would "receive many more votes than that now."
Since the 2005 vote, Schumer and Graham have delayed a formal vote three times.
The bill provides a six-month negotiating period to revalue the Chinese yuan.
Although Schumer voiced optimism, Commerce Secretary Carlos Gutierrez said China must deal with U.S. concerns on a number of trade issues.
"We believe that action needs to take place in order for China to achieve that role as a responsible stakeholder" in the global economy, the cabinet member said before embarking on a trade mission to Beijing on Saturday.
The senators mission was met with strong reactions in some quarters.
"No one can exert pressure, no one can interfere with China's affairs. The U.S. is not the father of the world," said Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation, under the Ministry of Commerce.
China has "no timetable" for further easing of its foreign-exchange controls, said Hu Xiaolian, deputy governor of China's central bank.
And in Tokyo, Japan announced it is freezing its loans to China until the end of the month because of worsening relations between the two countries on trade, natural resources and conflicting interpretations of World War II history.
A government official said Japanese loans to China may be released next month if relations improve.