Bill targeting China over currency manipulation set to advance

Legislation targeting China that would crackdown on countries found to be manipulating the value of their currency is expected to advance in the Senate on Monday.

Democrats have positioned the bill as an effort to preserve jobs in the United States. They estimate that nearly 2 million U.S. manufacturing jobs have been lost during the last decade due to increased import trade from China.

But the bill’s chances are less certain in the GOP-controlled House, where Majority Leader Eric Cantor of Virginia raised concerns Monday about igniting a trade war that could lead to higher prices for U.S. consumers.

The administration has yet to weigh in on the proposal. President Obama and Treasury Secretary Timothy Geithner have been critics of China’s currency policies.

The legislation would impose duties on imports from countries found to be undervaluing their currency. It would also revamp the way the Treasury Department defines currency manipulation.

“Enough is enough, it’s time that we level the playing field,” said Sen. Charles Schumer (D-N.Y.), a co-sponsor of the bill. “This strong bipartisan legislation is a clear, unwavering message from both parties to China’s leaders -- the jig is up, it’s time to stop gaming the system or face severe consequences.”

But Cantor said he wanted more information from the administration on “unintended consequences that may result” from the policy, particularly on consumer prices.

“If there are unfair practices going on, we should look to our trade representative to address those,” Cantor said.

The fiscally conservative group Club for Growth is urging Republicans to vote against the measure, arguing that “starting a trade war with China will have no winners and many losers.”

The legislation enjoys bipartisan support in the Senate and was expected to overcome a procedural hurdle on Monday, which would advance the bill.