New York Senator Charles Schumer and South Carolina Senator Lindsey Graham have been crusading against China for years. They have long blamed China for U.S. trade problems, and have on several occasions sought to push a bill in the U.S. Senate that would impose a 27 percent duty on all Chinese imports if China did not revalue the yuan by a similar amount during a specific period of time. Up through 2006, the Bush Administration was able to stall or stop their efforts. After withdrawing the bill last year, the senators vowed to reword the legislation and present the bill in a WTO complaint form that would draw strong enough support to be veto-proof.

It is unclear if the new bill will be veto-proof, but the senators, along with Senators Max Baucus and Charles Grassley, have reintroduced a new bill. The new bill takes a whole new approach. The bill does not name China; instead, it deals with the broader issue of exchange rates. It requires the U.S. Treasury Department to coordinate with the Federal Reserve and other central banks to intervene in currency markets when it deems a country's currency is being distorted for trade benefit. The bill outlines a very broad-based requirement for the Treasury Department, and that is to monitor exchange rates and determine if a rate is be being driven by government intervention. If the department deems a currency/U.S. dollar exchange rate is being distorted, then the U.S. Trade Department will be given a one-year deadline to file a complaint with the WTO that the offending government action was in effect an export subsidy. The Treasury Department would then have to consult with the Federal Reserve and other central banks to intervene in currency markets to correct the problem.

The bill's sponsors are saying that it is WTO compliant and has extensive support in the Senate. The bill joins several other anti-China bills that have been introduced in recent days.