Baucus Cautions China On Currency Policy.

China must allow its currency to appreciate and help address the United States' record trade deficit to head off legislation that would impose tariffs of 27.5 percent on Chinese imports, Senate Finance ranking member Max Baucus, D-Mont., said today in Beijing. "It is in China's interests to make concrete progress in reducing the trade imbalance,'' Baucus told U.S. businessmen. "U.S. politics on China will become unmanageable if China's trade deficit with the United States continues to grow.'' The U.S. trade deficit is on course to exceed $700 billion in 2005, with China accounting for a third of the total. Sen. Charles Schumer, D-N.Y., said last month that he will push for a vote early this year on a proposal to impose tariffs of 27.5 percent on imports from China if the Asian nation does not make the yuan more flexible. "If it actually comes up for a vote, a lot of members of Congress are going to be sorely tempted to support it,'' Baucus told Bloomberg News after his speech. Baucus also said China might lift its ban on U.S. beef imports, calling talks with China's Commerce Minister Bo Xilai "very, very encouraging." He added, "After my recent conversation with Minister Bo, I expect next time we all lunch together it will be on American beef.''