Yesterday, two influential senators Charles E. Schumer, a New York Democrat, and Lindsey Graham, a South Carolina Republican, dropped the legislation that would impose tariffs 27.5% on imports from China if it did not allow the value of its currency to rise. The bill that many Americans believed would make China’s exports to the United States more expensive and imports from America more competitive.
This is not true. If 27.5% tariff was imposed by U.S., China will proportionally impose tariff too, that will offset any tariff effect between two countries.
In addition, many Americans have been told that China's currency is undervalued by 15 to 40 percent, (some said by 60 percent) which giving Chinese companies an unjustified advantage at the bilateral trade with the United States.
As far as I know, majority of economists disagree with that view. The case is not very difficult to explain in economics, but it is complicated in politics.
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