Reform Trade by Fixing the Overvalued Dollar

Sign our petition to help us convince Congress and the Trump administration to eliminate the US trade deficit by fixing our overvalued dollar. An overvalued dollar makes American goods and services less competitive in global markets. The Competitive Dollar for Jobs and Prosperity Act will create good jobs, rebalance trade and rebuild American prosperity.

Learn more below.  And make sure to sign the petition!

Skip Hartquist, President & General Counsel, Copper & Brass Fabricators Council:

"Currency misalignment is the trade-distorting measure American copper and brass fabricators unanimously and persistently raise as a major cause of the unfair competition they face in the global marketplace. The Competitive Dollar for Jobs and Prosperity Act would provide a much needed tool to counter the injurious effects of currency intervention, manipulation and foreign government subsidized imports on U.S. manufacturers."

M. Brian O’Shaughnessy, Chairman, Revere Copper Products, Rome NY:

"Revere produces copper sheet, strip, coil and bus bar which are shipped mostly to domestic manufacturing facilities for further fabrication. The misalignment of the overvalued US dollar is the single most detrimental factor that has led to imports supplying as much as 22% of our domestic markets and causing the offshoring of 30% of our customer base since 2000. These imports are coming in from Mexico, Asia, South America and Europe—the MAC is a tool that does not pick winners and losers but will significantly improve the competitiveness of Revere against all foreign competitors."

Joseph Gagnon, Senior Fellow, Peterson Institute for International Economics:

"The United States should abandon the strong dollar policy in favor of a sensible dollar policy aimed at avoiding large and persistent trade imbalances. The right tools for the job are foreign exchange intervention and taxation of foreign capital, including through a flexible market access charge."

Kevin Kelley, President Rochester Technology and Manufacturing Assn, Rochester NY:

"The Rochester Technology and Manufacturing Association strongly supports the Competitive Dollar for Jobs and Prosperity Act (CDJPA). Our member manufacturers are globally competitive, but their profitability and workers are harmed when foreign capital inflows drive the dollar price above competitive levels. The CDJPA provides the goals and tools essential for our members to grow their businesses and their employment in the future. It is long overdue."

Bill Bullard, CEO, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA):

"America’s largest agricultural sector, the U.S. cattle industry, is highly sensitive to import surges. With an overvalued dollar, multinational meatpackers source more cattle and beef from foreign countries, which limits demand for domestic cattle raised by America’s farmers and ranchers. The MAC will end the artificial advantage enjoyed by foreign countries and exploited by multinational meatpackers by eliminating the currency distortions associated with other countries devalued currency and the United States’ overvalued dollar."

Roger Johnson, President, National Farmers Union:

“The overvalued dollar puts American family farmers and ranchers on an uneven playing field with the rest of the world. And right now, it’s pushing down crop and livestock prices at a time when farmers and ranchers are already dealing with a prolonged stretch of very low prices. We also rack up a larger trade deficit as a result of the overvalued dollar, and that trade deficit destroys good paying jobs that support our communities. The Competitive Dollar for Jobs and Prosperity Act is needed to restore fairness to international trade markets and to provide opportunity for economic prosperity for American family farmers and ranchers.”

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An Explanation of  The Competitive Dollar for Jobs and Prosperity Act

April 23, 2018 (Short Version Memorandum)
Click here to view as PDF


President Trump’s recent tariff actions are one way of addressing America’s trade imbalances and industrial decline. But currency exchange rates are a more powerful driver of trade surpluses and deficits, and a greater obstacle to increased US production. Currently, persistent US dollar overvaluation causes much of America’s multilateral trade deficit—with an overvalued dollar raising the price of US goods and services in global markets. While the United States has an array of fiscal and monetary tools to manage its internal economy, it lacks effective exchange rate management tools to manage trade flows that have a powerful effect on the domestic economy.

The Competitive Dollar for Jobs and Prosperity Act provides these tools as well as standards that govern their use.

Exchange Rates and Global Trade Balances

Flexible exchange rates should adjust automatically to levels that balance trade. Unfortunately for the United States, this mechanism has been disrupted for many years, raising the value of the dollar far above its trade-balancing price.

First, global capital flows are increasingly dominated by private sector financial transactions. As issuer of the world’s most sought-after currency, the US consistently attracts large net inflows of foreign capital. This large net foreign demand for dollars and dollar-denominated assets drives up the dollar’s value, raising the price of US goods and making them less competitive in US and foreign markets. Imports surge into the US because they are artificially cheap, displacing American-made products and services. US exports become too expensive for foreign buyers.

The other cause of an overvalued US dollar is currency manipulation—when the governments of other countries hoard dollars received for their exports rather than exchange them. China, Japan, and South Korea have grown to be manufacturing powerhouses at US expense in large part due to such currency manipulation.

The US needs the tools to deal with both mercantilist tactics and excessive, private capital inflows.

Competitive Dollar for Jobs and Prosperity Act

The Competitive Dollar for Jobs and Prosperity Act would task the Federal Reserve with achieving and maintaining a current account balancing price for the dollar within five years. It would create an exchange rate management tool in the form of a Market Access Charge (MAC)—a variable fee on incoming foreign capital flows used to purchase dollar assets. The Fed would set and adjust the MAC rate. The Treasury Department would collect the MAC revenue. The result would be a gradual move for the dollar toward a trade-balancing exchange rate. The legislation would also authorize the Federal Reserve to engage in countervailing currency intervention when other nations manipulate their currencies to gain an unfair trade advantage.

Key Parts of the Competitive Dollar for Jobs and Prosperity Act (CDJPA)

The CDJPA does these things:

1. Amends the Federal Reserve Act to add a third mandate—achieving a current account balance—to the existing, dual mandate of the Fed for full employment and price stability.

2. Creates an exchange rate management tool called the Market Access Charge (MAC) on “covered transactions” to gradually achieve and maintain a trade-balancing price for the US dollar.

2.1 Instructs the Fed to set and adjust the MAC, moving it higher or lower as needed, to moderate incoming capital flows and achieve a current account balance.

2.2 Allows the Fed to consider impacts on US economic output, employment, interest rates, and markets in setting and adjusting the MAC.

3. Defines Covered Transactions as all foreign purchases of securities and other US assets denominated in USD.

4. Tasks the Treasury with administering the collection of the MAC

5. Allows the Fed to engage in countervailing currency intervention to neutralize currency manipulation by other countries.


The CDJPA provides the missing tools America needs to defend its industries, workers, farmers, and ranchers from incoming foreign capital that weaponizes the dollar against domestic manufacturers and agricultural producers. The CDJPA would re-establish the dollar’s connection with a trade-balancing price, increase exports, create good paying jobs, and achieve broadly shared prosperity.

An Explanation of the Competitive Dollar for Jobs and Prosperity Act

April 20, 2018 (Long Version Memorandum)
Click here for the PDF


The Competitive Dollar for Jobs and Prosperity Act would task the Federal Reserve with achieving and maintaining current account balance and give it the tools to achieve that goal. These tools are designed to neutralize the excessive private capital inflows and currency manipulation by foreign governments that drive up the US dollar, making American goods and services less competitive in foreign and US markets and increasing the trade deficit.


America’s persistent ongoing trade deficit is finally being recognized as a significant economic and political problem.

Trade enforcement and tariff action are now being used to address issues of national security (section 232, 1962 Trade Expansion Act), intellectual property theft (section 301, 1974 Trade Act), and serious industry harm (section 201, 1974 Trade Act). Such tariffs can effectively remedy sector-specific trade impediments, manage the composition of US trade, and, if applied to a sufficiently large percentage of imports from a particular country, remedy bilateral trade imbalances.

However, tariffs alone cannot lower the value of the dollar enough to balance trade overall. Why? Because when tariffs reduce imports, they create upward pressure on the USD exchange rate. This results in reduced US exports and more imports in sectors and from countries not subject to tariffs, thus offsetting most of the effect of the tariffs on the overall balance of trade.

To reduce and eliminate its trade deficit America needs other, more direct ways to manage the dollar’s exchange rate. Without it, our economy is subject to the actions of both foreign governments and private sector actors who want to accumulate more dollar assets.

Foreign central banks and sovereign funds often accumulate dollar reserves to protect themselves from capital market pressures or to gain a trade advantage by holding down the value of their currencies. During the “decade of manipulation”-- 2003 to 2013--20 countries, including China, manipulated their currencies in this way. The US current account deficit reached its highest levels on record during that period.  Although China is not now manipulating its currency, other countries continue to do so. And there is every reason to believe that China will resume the practice when it serves its interests.

The other key driver of USD overvaluation is large net private capital inflows— purchases by foreign persons of USD securities in US markets that greatly exceed sales.  Foreign private capital is attracted to the US because (a) the dollar is the world’s reserve currency and a safe store of value; and (b) because America’s securities markets are also the largest, most liquid, and most secure in terms of the rule of law. Even during the peak years of currency manipulation (2000 to 2010), this net private inflow was 3.8 times larger than the amounts of USD securities accumulated by foreign central banks. And from 2010 to 2015, average net private inflows were $150 billion per year, while foreign central bank banks were actually selling over $100 billion of US securities annually.

Whether the excessive net purchases of US assets are private or governmental, the result is the same: a dollar price that exceeds the current account-balancing equilibrium price and makes all US goods and services less competitive in both domestic and overseas markets.

Facing a large current account deficit in 1985, the Reagan administration abandoned its “benign neglect” of the dollar and negotiated the Plaza Accord. The dollar was devalued by 30 percent over the next 18 months, bringing the US current account into balance by 1991. No US administration has addressed dollar exchange rates since that time.

As of May 2017, the dollar was 25 percent overvalued (against a trade weighted basket of currencies) compared to the set of exchange rates that would bring US trade into balance. The dollar has fallen somewhat in the last year, but remains far above its trade-balancing equilibrium price.

The US Treasury Department has recognized this problem:

In general, current account surpluses among several major trading partners over the last two decades have proven both large and persistent. The global adjustment process has not worked effectively in the post-crisis era to promote a symmetric adjustment toward smaller imbalances in a manner that sustains – rather than inhibits – global growth. Nor are there signs that typical adjustment mechanisms – most notably real exchange rates and relative rates of demand growth – are currently pointing toward a narrowing of external imbalances.(5)

The United States does not have effective tools to manage this aspect of trade policy.

The Competitive Dollar for Jobs and Prosperity Act

The Competitive Dollar for Jobs and Prosperity Act (see draft bill attached) would establish an exchange rate management policy and provide tools to administer it.

The Act would charge the Board of Governors of the Federal Reserve with achieving and maintaining current account balance for the United States. It would authorize and direct the Fed to charge a variable rate fee—the Market Access Charge—on incoming capital to deter and reduce excessive inflows. It would also authorize the Fed to neutralize exchange rate manipulation by other governments through countervailing intervention in foreign exchange markets.

Specifically, the bill would:

1. Amend the Federal Reserve Act to add a third mandate—achieving and maintaining current account balance—to its two existing mandates of full employment and price stability.

2. Create an exchange rate management tool to be administered by the Fed—the Market Access Charge (MAC)—to gradually achieve a trade-balancing price for the US dollar.

1. Instruct the Fed to set and adjust the MAC, moving it higher or lower as needed, to moderate incoming capital flows to achieve current account balance

2. Allow the Fed to consider impacts on US economic output, employment, interest rates, and markets in setting and adjusting the MAC.

3. Define “covered transactions” as all foreign purchases of securities and other US assets denominated in USD.

4. Task the Treasury with administering the collection of the MAC. The MAC would be charged to purchasers and remitted to the Treasury by banks and non-financial institutions that already electronically report on these transactions under the Bank Secrecy Act and from transfer agents that already report under the Securities Exchange Act.

5. Authorize the Fed to engage in countervailing currency intervention to neutralize currency manipulation by other countries.

Questions and Answers:

Question: Is the bill compatible with international law and regulation?

Answer: The IMF has approved capital flow management tools like the MAC since 2012. The MAC would also be WTO-compliant since WTO rules do not deal with capital flows.  

Question: Will reducing foreign demand for US Treasuries and other US assets raise US interest rates, stifling economic recovery? 

Answer: Unlikely. The weaker dollar will increase foreign and domestic demand for US products and reduce foreign competitors’ market share in US and foreign markets. Over time—the consensus is about two years—the increase in production and investment caused by the weaker, more competitive dollar will stimulate the economy. If interest rates begin to rise before then, the Fed has powerful monetary tools, including control of the federal funds rate, open market operations, and quantitative easing, to maintain short- and long-term interest rates at target levels. Any upward pressure on rates from the MAC would be fully offset.

Question: Who developed the MAC?

Answer: The MAC was first proposed by John R. Hansen, an international economist and 30-year veteran of the World Bank. The concept and the draft bill have been developed and extensively vetted by the Coalition for a Prosperous American (CPA) as well as Joe Gagnon (Senior Fellow, Petersen Institute international Economics) and Rob Scott (Senior Economist and Director of Trade and Manufacturing Policy Research at the Economic Policy Institute).

Question: What would be the jobs and growth impact of the Act?

Answer: Since America's trade deficit is largely in manufactured goods, the jobs and economic growth that ending the deficit would bring back would initially be concentrated in manufacturing. Expansion in related services sectors and upward pressure on wages in other industries would follow.  

Question: How much revenue would the Act generate?

Answer: The MAC would generate substantial revenues, well into the billions of dollars in its early years. The amount would increase as the MAC charge ramps up to start the dollar on a downward path and stabilize within a somewhat lower range when current account balance is achieved. 

Question: How does the countervailing currency intervention part of the Act fit with the MAC?

Answer: When a country manipulates or devalues its currency to drive up the dollar, that action is best addressed by countering that country’s actions directly rather than increasing the MAC charge for all inflows. Using only the MAC for single country manipulation would force the MAC higher than otherwise required, penalizing “innocent bystander” countries.

Question: Would we need tariffs when the MAC is in place?

Answer: Yes. Tariffs address different problems such as trade law violations and sub-optimal composition of trade and production. For example, the US is now running a $103 billion deficit in advanced manufactured goods because of trade barriers and intellectual property theft by other countries as well as the overvalued USD. To avoid balancing trade by selling more soybeans and natural gas, while leaving much of this high tech deficit in place, tariffs are still needed alongside the MAC.

Question: Would the Act’s new current account balance mandate, coupled with the tools to pursue the mandate, complement the Fed’s existing mandates of full employment and price stability?

Answer:  Yes.  The Act would give the Fed the mandate to balance the current account and the tools to accomplish this by directly controlling USD exchange rates.  This would allow the Fed to carry out domestic monetary and fiscal policy without offsets or interference from foreign government currency manipulation or private sector capital markets.  In fact, the Act would complete the suite of tools required to effectively manage the US economy.

Question: What industries support the MAC concept?

Answer: As of April 16, 2018, trade associations representing tooling, machining, agriculture, and copper have officially supported the bill. CPA will maintain a real time list on its website.

Question: What congressional offices support the MAC concept?

Answer: 140 congressional offices, from both parties, have responded favorably in the past year. Some of these offices support tariffs and some oppose tariffs, indicating that exchange rate management could generate broader support than other trade measures.

1. Bergsten and Gagnon, “Currency Conflict and Trade Policy,” pp. 69, 72, Peterson Institute for International Economics, 2017.

2. Calculations by John R. Hansen based on data from the Treasury International Capital System.

3. Bergsten, supra at 14.

4. For a detailed explanation of the 25% undervaluation estimate and the MAC, see the Coalition for A Prosperous America (CPA) paper The Threat of US Dollar Overvaluation: How to Calculate Exchange Rate.com Misalignment and How to Fix It.

5. Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, April 13, 2018, p. 30

Questions and Answers Regarding the Competitive Dollar for Jobs and Prosperity Act

1. How much dollar devaluation is required to balance trade?

According to estimates from the Peterson Institute of International Economics, a dollar devaluation of some 20% from current levels would be required to eliminate the US trade deficit ($566 billion last year) and lead to balanced trade. The Competitive Dollar for Jobs and Growth Act (CDJPA) would deliver this devaluation over a period of years to minimize any disruption from the change in the dollar’s value. In addition to the benefits of a more competitive dollar, a new international exchange regime incorporating the Market Access Charge (MAC) will create greater predictability in the exchange markets. Instead of no clear dollar policy, the US would have a very clear policy of moving the dollar to a competitive level as measured by published data on the US trade balance. The expectation of a strong and consistent policy may accelerate the adjustment and enable the US to achieve balance even before the dollar falls by the percentage indicated by economic models.

2. What Market Access Charge (MAC) rate is required to deliver balanced trade?

It is likely that the MAC would be implemented with a launch rate of 0.5%. It would then be increased, at the discretion of the Federal Reserve, to deliver an orderly move in the US dollar exchange rate and with it an improvement in US competitiveness. As with domestic interest rates managed by the Federal Reserve, we expect the MAC will be moved in small increments and few times each year, in order to deliver the steady predictability optimal for managing financial markets.

3. Which industries will benefit from a lower dollar and balanced trade?

The MAC is an extremely broad-based tool for stimulating the US economy. Every industry that operates in international markets will benefit from a more competitive dollar and a better export/import balance. This includes almost all of our manufacturing industry, as well as many mineral and oil products, and agricultural commodities and food products. For many farm products, as for minerals, the market is global and highly competitive. A dollar depreciation of say 10% will allow farmers and mining companies to raise the dollar price of their products by 10% and still be competitive in international markets. In manufacturing, where foreign competition is often a major factor pressuring prices, revenue, profitability, and employment, a dollar devaluation will provide an advantage to US manufacturers in the US market and in export markets. In service industries like tourism and education, dollar devaluation makes US services more affordable for foreign buyers, so those industries can expect an increase in overseas customers once the MAC is implemented.

4. How would a lower dollar and balanced trade affect manufacturing employment and total employment?

The proposed bill would likely to provide a significant boost to US manufacturing employment by boosting production in many manufacturing sectors. The impact is likely to be strongest in commodity markets, where undifferentiated products will gain an immediate competitive advantage and respond by boosting production and employment. This includes products like primary metals, textiles, farm products, and technology products like memory chips. In branded products, the increase in production and employment will take longer but the increased competitiveness will still be a powerful benefit for producers in competitive markets. As a general guide, the elimination of the US trade deficit of over $500 billion a year can be expected to lead to the creation of 3 million additional jobs.

5. How much revenue would the Act generate?

The MAC would generate substantial revenues, well into the billions of dollars in its early years. The amount would increase as the MAC charge ramps up to start the dollar on a downward path and stabilize within a somewhat lower range when current account balance is achieved.

6. How will this impact Americans’ savings in their 401k plans?

The move to a more competitive dollar will not affect the value of dollar assets in Americans’ 401k or any other type of retirement portfolio. Today, most professionally managed portfolios typically include a majority of US assets and a smaller share of assets allocated to foreign funds or securities. US assets will be have the same dollar value as before. Foreign assets will be worth more in dollars once the MAC moves the dollar to a more competitive level. The foreign-denominated dividends from those securities will also be worth more after the MAC implementation.

In general though, most savers will notice little or no impact from the MAC on their retirement portfolios.

7. How will the bill impact interest rates?

The CDJPA is expected to have a very minor impact or no impact at all on US interest rates. Since before the financial crisis of 2008, the US has economy has been hobbled by the “global savings glut,” a term used by economists including former Federal Reserve chairman Ben Bernanke to refer to an excess of savings over profitable uses for those funds. This means that there are ample resources in the US and the world to meet the needs of US borrowers, including the US Treasury and private borrowers. The MAC would provide a disincentive for foreign investors, especially private investors, to purchase US securities, but the potential pool of capital from US investors and those foreign investors willing to pay the MAC will still be large enough to meet the borrowing needs of US markets.

8. Will the bill make it harder for the federal government to sell Treasuries and fund the federal budget deficit?

No. The US Treasury market is the deepest, broadest, and most liquid financial market in the world. As above, the wide availability of worldwide savings will still be available to invest in US government debt and the MAC’s impact is likely to be minimal.

9. How will the bill impact inflation?

The CDJPA would move the dollar exchange rate to a more competitive level over a period of several years. Over that period, as the dollar depreciates, the cost of imports will experience a one-time rise. Imports account for some 15% of national spending, so the impact on inflation will be only a small fraction of the movement in the dollar. In addition, a more competitive dollar will spur increases in production and employment in all our industries that either export or compete with imports. So the dollar depreciation will stimulate an increase in incomes that will more than compensate for the modest increase in prices.

10. How will foreign countries react if we implement the bill and gradually devalue the dollar?

The introduction of the CDJPA into Congress to authorize and create the MAC will stimulate wide international debate on the MAC and the state of today’s foreign exchange markets. Some countries may object that the bill amounts to “currency manipulation”. But currency manipulation occurs when a country moves its currency away from its trade balancing price. Because the United States (1) has a trade deficit (rather than a surplus) and (2) the CDJPA moves the dollar towards its trade balancing price (rather than away from its trade balancing price), the bill does not violate international rules. If other countries adopt a similar bill to maintain their currency at a similarly fair price, that would be beneficial. If other countries manipulated their currency to increase a pre-existing trade surplus, then they would be in the wrong. The CDJPA would allow the Federal Reserve to counter intervene in that currency to neutralize that third countries’ wrongful action.

11. How will this impact the dollar's status as the world's reserve currency?

The US dollar will continue to be the world’s preeminent reserve currency, and preferred currency for international trade for decades to come. However, in recent years, many of the world’s major central banks and private investors have begun to diversify and use other currencies for reserve and trading purposes. Those secondary currencies include the euro, the yen, the pound sterling, and the Swiss franc. The implementation of the MAC will accelerate the process of diversification, in a gradual manner. Far from “exorbitant privilege,” the status of premier reserve currency is a poisoned chalice because it leads to an overvalued currency and undermines a nation’s competitiveness and productive capacity. Therefore a reduction in the dollar’s role as the world’s dominant reserve currency is to be welcomed.

12. What other nations have tried foreign currency controls or taxes and what were their experiences? What can we learn from them?

A number of nations in Europe, Asia, and Latin America have used capital flow management (CFM) tools with varying degrees of success. IMF economists have studied those experiences and concluded that CFM tools have succeeded in reducing capital inflows, and especially short-term inflows. These policies need to be complemented with supportive domestic policies. Evasion of capital controls has been a problem for some countries, particularly when some kinds of investment are permitted and others are restricted. The MAC has been designed as a broad-based tax applicable to any kind of investment in US assets by any foreign person or entity to minimize opportunities for avoidance.

 13. Does the MAC violate any tax treaties we have with other nations?

Bilateral tax treaties are routinely renegotiated between nations as each nation changes its tax policies. The US Treasury routinely handles such negotiations and will be able to handle the negotiations required for the MAC.

 14. Does a MAC interfere with or violate US obligations under existing trade law or trade agreements?

Trade agreements generally do not place any requirements or limitations on management of currencies. The IMF has approved capital flow management tools like the MAC since 2012. World Trade Organization (WTO) prohibit a country from manipulating its currency to achieve or increase a trade surplus. The CDJPA would push the dollar downward to eliminate our trade deficit and therefore does not violate WTO rules.

Competitive Dollar for Jobs and Prosperity Act

Title: To establish a national goal and mechanism to achieve a trade-balancing exchange rate for the United States dollar, to impose a market access charge on certain purchases of United States assets, and for other purposes.

Click here to view as PDF

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


This Act may be cited as the “Competitive Dollar for Jobs and Prosperity Act”.


(a) Findings.—Congress makes the following findings:

(1) The strength, vitality, and stability of the United States economy and, more broadly, the effectiveness of the global trading system are critically dependent on an international monetary regime of exchange rates that respond appropriately to eliminate persistent trade surpluses or deficits by adjusting to changes in global trade and capital flows.

(2) In recent decades, the United States dollar has become persistently overvalued, in relation to its trade-balancing equilibrium rate, because of excessive foreign capital inflows from both public and private sources.

(3) Countries with persistent trade surpluses maintain or benefit from undervalued currencies over a long period of time. As a result, those countries overproduce, underconsume, and rely excessively on consumers in countries with persistent trade deficits for growth. Those countries also export their unemployment and underemployment to countries with persistent trade deficits.

(4) Countries with persistent trade deficits, including the United States, absorb the overproduction of countries with persistent trade surpluses, thereby reducing domestic wages, manufacturing output and employment, economic growth, and innovation.

(5) The United States possesses fiscal and monetary tools to pursue national economic goals for employment, production, investment, income, price stability, and productivity. However, exchange rates that do not adjust to balance international trade can frustrate achieving those goals. The United States does not have a tool to manage exchange rates in the national interest.

(b) Sense of Congress.—It is the sense of Congress that—

(1) it is consistent with the obligations of the United States as a member of the World Trade Organization and the International Monetary Fund that the United States use a capital flow management tool to move the United States dollar to its trade-balancing exchange rate; and

(2) it is in the national interest of the United States to establish exchange rate management tools to consistently achieve a trade-balancing exchange rate.


In this Act:

(1) Covered buyer.—The term “covered buyer” means a foreign person or a person located outside the United States that purchases a United States asset in a covered transaction.

(2) Covered transaction.—The term “covered transaction” means the purchase or acquisition by a covered buyer of a United States asset the value of which exceeds $10,000.

(3) Current account balance.—The term “current account balance” means that current account deficits do not exceed an average of 0.5 percent of the gross domestic product of the United States in any five-year period.

(4) Domestic financial institution.—The term “domestic financial institution” has the meaning given that term in section 5312 of title 31, United States Code.

(5) Entity.—The term “entity” includes—

(A) a corporation, partnership, or limited liability company; or

(B) a trust or estate.

(6) Foreign person.—The term “foreign person” means any individual or entity that is not a United States person.

(7) Market access charge.—The term “market access charge” means the fee imposed under section 5 with respect to a covered transaction.

(8) Person.—The term “person” means an individual or entity.

(9) Secretary.—The term “Secretary” means the Secretary of the Treasury.

(10) Security; transfer agent.—The terms “security” and “transfer agent” have the meanings given those terms in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c).

(11) United states asset.—

(A) In general.—Except as provided in subparagraph (B), the term “United States asset” means—

(i) a security, stock, bond, note, swap, loan, or other financial instrument—

(I) the face value of which is denominated in United States dollars;

(II) that is registered or located in the United States; or

(III) that is an obligation of a United States person;

(ii) real property located in the United States;

(iii) any ownership interest in an entity that is a United States person;

(iv) intellectual property owned by a United States person; and

(v) any other asset class or transaction identified by the Board of Governors of the Federal Reserve as trading in sufficient volume to cause a risk of upward pressure on the exchange rate of the United States dollar.

(B) Exceptions.—The term “United States asset” does not include—

(i) a good being exported from the United States; or

(ii) currency or noninterest bearing deposits.

(C) Consideration by board of governors.—Not less frequently than annually, the Board of Governors shall consider whether to identify additional asset classes or transactions under subparagraph (A)(v).

(12) United states person.—The term “United States person” means—

(A) a citizen or resident of the United States; or

(B) an entity organized under the laws of the United States or any jurisdiction within the United States.


(a) Amendment to Federal Reserve Act.—Section 2A of the Federal Reserve Act (12 U.S.C. 225a) is amended—

(1) by inserting, in the section title, “and exchange rate” after Monetary;

(2) by inserting “the United States exchange rate and” after “shall maintain”; and

(3) by inserting “current account balance (as defined in section 3 of the Competitive Dollar for Jobs and Prosperity Act),” after “stable prices,”.

(b) Amendment to Federal Reserve Act.—Section 2B(a)(1)(A) of the Federal Reserve Act (12 U.S.C. 225b(a)(1)(A)) is amended by inserting “and exchange rate” after “monetary”.

(c) Exchange Rate Management Policy.—

(1) In general.—The Board of Governors of the Federal Reserve System shall establish an exchange rate management policy to achieve and maintain a current account balance.

(2) Mechanisms.—To achieve a current account balance as required by paragraph (1), the Board of Governors—

(A) shall use the market access charge imposed under section 5; and

(B) may engage in foreign exchange intervention.


(a) Imposition.—On and after the date that is 180 days after the date of the enactment of this Act, there shall be imposed a market access charge on each covered buyer in a covered transaction.

(b) Calculation of Rate.—

(1) In general.—The Board of Governors of the Federal Reserve System shall establish and adjust the rate of the market access charge at a rate that—

(A) achieves a current account balance not later than [5] years after the date of the enactment of this Act; and

(B) maintains a current account balance thereafter.

(2) Effects of noncrisis movements.—

(A) In general.—Subject to subparagraph (B), the Board of Governors may take into consideration the minimization of disruptive effects on output, employment, interest rates, and foreign exchange, securities, and asset markets.

(B) Limitation.—The Board of Governors may not adjust the market access charge in reaction to noncrisis movements in the markets described in subparagraph (A).

(3) Alternate initial market access charge.—If, on the date that is 180 days after the date of the enactment of this Act, the Board of Governors has not established the initial rate for the market access charge, the initial market access charge shall be established at the rate of 50 basis points of the value of a covered transaction.

(c) Collection and Reporting.—

(1) In general.—The market access charge shall be collected from a covered buyer in a covered transaction as follows:

(A) In the case of a covered transaction involving a registered security, the transfer agent shall collect the market access charge.

(B) In the case of a covered transaction not involving a registered security and through which a domestic financial institution receives funds from the covered buyer, the domestic financial institution shall collect the market access charge.

(C) In the case of any covered transaction not described in subparagraph (A) or (B), the United States person that is the counterparty to the covered buyer or otherwise receives funds from the covered buyer pursuant to the covered transaction shall collect the market access charge.

(2) Transfer to treasury.—At the end of each month, each person collecting a market access charge under paragraph (1) shall transfer to the Secretary the amount of all market access charges collected by the person during that month in such manner as the Secretary may prescribe.

(3) Reporting.—The Secretary shall require each person collecting a market access charge under paragraph (1) with respect to a covered transaction to keep records and file reports with the Secretary that include, in the manner and to the extent the Secretary prescribes—

(A) the identity and address of participants in the transaction;

(B) a description of the legal capacity in which each participant in the transaction is acting;

(C) the identity of real parties in interest;

(D) a description of the transaction, including the nature of the United States asset involved and the price paid;

(E) the amount of the market access charge collected and the amount retained as a service fee pursuant to paragraph (4); and

(F) such other information as the Secretary may prescribe.

(4) Service fee.—A person collecting a market access charge under paragraph (1)(A) or (B) may retain, from the amount of the market access charge collected, a service fee, in an amount prescribed by the Secretary, to compensate the person for the administrative costs of collecting the market access charge.

(5) Penalties.—

(A) Transfer agents.—A transfer agent that violates the requirements of this subsection shall be subject to a penalty under section 32 of the Securities Exchange Act of 1934 (15 U.S.C. 78ff) to the same extent as if that agent violated a provision of that Act.

(B) Domestic financial institutions and other united states persons.—A domestic financial institution or other United States person that violates the requirements of this subsection shall be subject to a penalty under section 5321(a)(1) or 5322(a) of title 31, United States Code, to the same extent as if that institution violated a provision of subchapter II of chapter 53 of that title.

(d) Deposit in Treasury.—The Secretary shall deposit all amounts received under subsection (c)(2) into the general fund of the Treasury.


The Secretary shall prescribe such regulations as are necessary to carry out this Act.

China Cannot Weaponize Its U.S. Treasury Bonds

May 29, 2019 | , Marketing & Communications Director

Editor’s note: Important for financial press (and others) to understand this. Excerpt: "By purchasing fewer U.S. government bonds... Beijing would leave the United States either unchanged or better off, while doing so would also leave China either unchanged or worse off." Note: This is a follow-up to an article here from May 16 and an updated version of a previously published January 2018 blog post. The original version can be accessed here.

Working Paper: Quantifying Economic Growth and Job Creation from a Competitive Dollar

February 14, 2019 | , CEO

This Working Paper presents the results of a CPA econometric model testing how much dollar adjustment is needed to balance US trade in six years and the dramatic economic benefits that would result from the adjustment. by Jeff Ferry (Chief Economist) and Steven Byers (Senior Economist)

Dethrone ‘King Dollar’

December 05, 2018 | , Media Director

Editor’s note. This four year old article by Jared Bernstein, former Chief Economist for former VP Joe Biden is an excellent explanation of why and how the US dollar value has a major influence on our trade deficit. CPA has the solution, a market access charge to moderate incoming capital flows and push the dollar down to a competitive price. WASHINGTON — THERE are few truisms about the world economy, but for decades, one has been the role of the United States dollar as the world’s reserve currency. It’s a core principle of American economic policy. After all, who wouldn’t want their...

Official Petition Text:

We support legislation to achieve a competitive dollar and to balance US trade. We urge Congress to support the Competitive Dollar for Jobs and Prosperity Act.