U.S. Chamber talks tough, but not on China

  • Article by: ERIC WIEFFERING , Star Tribune
  • Updated: January 18, 2011 - 9:27 PM

Unless the topic is trade with China, nuance does not come naturally to Tom Donohue.

Donohue is the president of the U.S. Chamber of Commerce, the country's biggest and most influential business advocacy group. Under Donohue, the Chamber has emerged as one of the fiercest critics of the Obama administration, and it's been credited with helping sweep the Republicans into power in the House.

Donohue took the Chamber's show on the road Tuesday, speaking in Minneapolis to more than 200 business executives. Despite recent peaceful overtures between the White House and the Chamber, Donohue hasn't softened his rhetoric.

He decried a "regulatory tsunami" that is "keeping your children out of work, that's putting your father out of work." He called for the repeal of health care reform, said the Dodd-Frank financial reform legislation vastly overreached, and described the consumer protection agency created by that legislation as, "the most intrusive you've ever seen anywhere." He pledged to work with Congress to "starve to death financially" new regulatory agencies and rule-writing efforts.

While he was at it, Donohue called the state of Illinois "insolvent. Period," even as he mocked it for increasing its personal and corporate tax rates. And he all but demanded that the United States implement new free trade agreements with South Korea and Colombia, calling the latter a "moral obligation," and slamming public sector unions for opposing free trade measures.

But, other than lamenting the level of China-bashing during the most recent election, Donohue was decidedly diplomatic when the topic turned to the value of China's currency -- an increasing source of tension around the world.

China is coming under increasing pressure from the U.S. government, Congress and other business groups for manipulating the value of its currency. Those policies have resulted in higher prices on American exports to China, lower prices for Chinese goods shipped to the U.S., and a widening trade imbalance.

Donohue, who said he would be having lunch on Wednesday with Chinese President Hu Jintao in Washington, didn't mention the currency issue during Tuesday's speech. When asked about it afterward, he advised the same thing he's been advising for nearly a decade: patience.

"We need an evolutionary change in the currency and we're getting it, rather than a revolutionary one," Donohue said.

But patience is wearing thin among others. The National Association of Manufacturers has said the "undervalued yuan remains the single most significant distortion of global trade." And some analyses show that allowing the value of the yuan to rise by 20 percent over the next few years would lead to more American exports -- and more American jobs.

But those numbers assume American companies operate in a vacuum when it comes to China. We don't. Allowing the value of China's currency to rise would not only make American manufactured goods cheaper, but also Germany's and every other country's.

"The dollar-yuan relationship is not the only one that matters," said Ed Dieter, executive director of the Minnesota Trade Office.

Donohue used to head a truckers group before he joined the U.S. Chamber in 1997, and his bare-knuckle approach hasn't always played well outside Washington. Last year, the U.S. Women's Chamber of Commerce slammed Donohue's group for its "big business scare tactics" around the consumer financial protection measures, and a few smaller regional chambers opted not to renew their membership.

But under Donohue the U.S. Chamber has become a money machine and a political force to be reckoned with. Its annual budget tops $150 million. It plans to step up its legal efforts to help fight antibusiness measures in states around the country and to hold accountable elected officials from Congress down to state supreme court judges and attorneys general.

"If you're voting against the things that we think are going to make this an effective country," Donohue said, "then we need to find you another career."

ericw@startribune.com • 612-673-1736

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