This week, the Senate Foreign Relations Committee advanced two bills introduced by Senator Dave McCormick (R-PA). The legislation aims to counter China’s growing economic influence and promote American interests at key international monetary institutions.
The first bill, the Strengthening United States Leadership at the Inter-American Development Bank Act, seeks to reinforce U.S. partnerships in the Western Hemisphere. It is designed to provide alternatives to Chinese investment and create new opportunities for U.S. companies. This could help generate jobs in the United States. The second bill, known as the China Exchange Rate Transparency (CERT) Act, calls for greater transparency in China’s exchange rate practices at the International Monetary Fund (IMF). Both measures received bipartisan support.
Senator McCormick stated, “China’s trade cheating, currency manipulation, intellectual property theft, and other nefarious behaviors present a growing economic and military threat to the United States and our allies. These measures take important steps to help American companies create jobs, provide alternatives to Chinese investment, and create greater transparency and stricter oversight of China’s economic commitments. I’m proud to continue working with my colleagues on both sides of the aisle to advance these priorities that are critical to our nation’s economic future and national security.”
The Inter-American Development Bank (IDB), established in 1959, is an institution where the United States holds the largest share of voting power. In 2023 alone, it financed $24.3 billion in projects throughout Latin America and the Caribbean region across public and private sectors.
Despite holding only a small percentage of shares on IDB’s public sector side—0.004%—companies from China have secured about 3% of public-sector procurement contracts over the past 15 years. By contrast, U.S.-based firms have averaged just 1%. Recently, Chinese companies won significant contracts such as a $4 billion deal for Colombia’s Bogotá metro system.
The proposed legislation instructs U.S. representatives at IDB to use their influence against increasing China’s role within IDB operations or its voting share relative to that of the United States.
Regarding currency issues addressed by the CERT Act: under IMF rules—specifically Article IV—the People’s Republic of China is expected not to manipulate its currency and must allow firm oversight by IMF officials regarding its exchange rate policies. However, recent findings from a Department of Treasury report note that “China stands out among our major trading partners in its lack of transparency around its exchange rate policies and practices.” The report further highlights concerns about rising imbalances stemming from these practices.
If enacted into law, this measure would require U.S. officials at IMF meetings to push for more scrutiny over how China manages its currency policy commitments under international agreements.
