The United States will take action if China does not begin to take steps in the coming months to raise the value of its currency, a top lawmaker in the U.S. House of Representatives warned on Monday.
Ways and Means Committee Chairman Sander Levin said he expected President Barack Obama's administration to use a pair of international meetings in June to put multilateral pressure on China to revalue its currency
If it doesn't work, the U.S. will act. I have no doubt about it. I think the administration will act and I think the Congress will act, the Michigan Democrat said in remarks at the National Press Club.
Levin, whose committee has jurisdiction over trade legislation, said he believed China's currency was clearly undervalued, and has been used by Beijing as a major tool for them to get an advantage economically over us.
But Levin also said he was willing to give Obama and U.S. Treasury Secretary Timothy Geithner at least until the Group of 20 summit meeting in Canada at the end of June to see whether multilateral pressure can persuade China to revalue its currency by a significant amount.
I think ... by the end of the G20 meetings, China will make the decision 'we'll begin to do this,' or else we'll take further steps, Levin said.
That schedule gives Beijing slightly more time to act than a late May deadline set by U.S. Senate leaders.
Many economists believe China's currency is undervalued by as much as 40 percent, giving it an unfair advantage in world trade by effectively subsidizing its exports while putting a de facto tax on imports.
President Barack Obama said he raised the issue of China's undervalued currency with Chinese President Hu Jintao last week and would continue to press the point.
China says its currency exchange rate is an internal matter and it will not be prodded into revaluing before it is ready.
However, another area of dispute could erupt this week in a case involving imports of aluminum extrusions from China used in the automotive and construction industry.
U.S. producers want the Commerce Department to investigate China's exchange rate as an illegal trade subsidy.
A Commerce Department spokesman confirmed the agency will announce on Wednesday whether to accept a petition filed by U.S. producers, but said he could not comment on the currency issue or other specific details of the case.
In another issue straining U.S.-China trade ties, the top Democrat and Republican on the Senate Finance Committee directed the U.S. International Trade Commission to investigate how many jobs the United States has lost from widespread counterfeiting of U.S. products in China.
They also asked the trade panel on Monday to probe China's indigenous innovation policies, which they said unfairly discriminates against U.S. products.
American workers, the American economy and American businesses are suffering because of China's failure to curb the rampant theft of American intellectual property, said Senate Finance Committee Chairman Max Baucus.
Rampant infringement of intellectual property rights costs the United States billions of dollars each year. These reports will shed light on the problem and help us solve it, Senator Charles Grassley said.