Today’s announcement that the annual U.S. trade deficit with China spiraled to a new record of $256 billion drives home the fact that our nation’s trade policies are failing working families.

Clearly, our imbalance with China is unsustainable. Our government must take immediate and effective actions to ensure that the Chinese government plays by the rules – with respect to currency, illegal subsidies, tax policies and workers’ rights. We know the Bush Administration won’t act, so Congress must step in.

Congress must pass the Currency Reform for Fair Trade Act (HR 2492), which declares currency manipulation an illegal trade subsidy and provides American manufacturers the opportunity to seek relief against countries that artificially regulate their currency, including China.

While strong exports and a falling dollar led to an overall decrease in the U.S. trade deficit in 2007 to $712 billion, it is alarming that the deficit with China jumped 10 percent last year. This enormous imbalance is even more glaring as deficits improve with most other parts of the world. The trade deficit with China now accounts for more than 48 percent of our non-petroleum manufactured goods trade deficit. The trade deficit in Advanced Technology Products also soared to $53.5 billion, led by products from China.

The dollar’s decline meant that the U.S. trade deficit in goods fell with many regions, including Europe by nine percent and South America by 40 percent. The fact that exports grew in areas where the dollar declined in value shows that the Chinese government’s manipulation of its currency is not only distorting our bilateral trade relationship, it is affecting global trade patterns.

There is growing consensus across party lines that our government needs to act immediately to address blatantly unfair trade policies. This is crucial if we are going to rebuild our manufacturing sector and reduce our dependence on borrowing from foreign governments.

Contact: Steve Smith (202) 637-5018