From the Financial Times (link)
The administration of President George W. Bush will face mounting pressure to take tougher action against China over the value of its currency with the introduction on Tuesday of legislation that would all but force the US Treasury to brand China as a currency manipulator.
The proposal, drafted by Senator Charles Grassley, the chairman of the powerful Senate Finance Committee, and Max Baucus, the committee’s leading Democrat, would threaten new sanctions against countries that are found to have “currency misalignments” with the US, according to people with knowledge of the proposal.
If a country were found to have a “misalignment”, it would be given six months to move towards a resolution of the problem. If it failed to act, the administration would be required to use a range of sanctions that would include blocking any increase in the country’s voting rights at the International Monetary Fund, and barring the country from receiving insurance and guarantees for US investors offered by the Overseas Private Investment Corporation, a US government agency that supports US companies investing abroad.
