The Senate has passed, with bipartisan support, a measure that would allow the United States to unilaterally punish China for its practice of artificially undervaluing its currency. The measure will proceed to the House, where it is presumably dead on arrival. House Speaker John Boehner (R., Ohio) has called the bill “dangerous” and argued that it could lead to a trade war. Furthermore, though the White House has repeatedly expressed opposition to such a measure in the past, it has yet to clarify a position of late. House Majority Leader Eric Cantor (R., Va.) told reporters today that it was “critical” for the Obama administration to take a stand on the measure. “What I would like to see is where the administration is. Clearly they’ve got concerns as well,” he said.
Douglas Holtz-Eakin explains here why the Senate bill is “a facile, politically clumsy way to address a situation that deserves a real solution.”