The US Senate passed a bill on Tuesday in retaliation for China’s policy of flooding the US with artificially cheap goods by holding the yuan at a weak exchange rate against the dollar. China in turn warned that the US’s actions could spark a trade war.
Discussions are now taking place between the White House and US lawmakers over concerns with the bill, press secretary Jay Carney said.
“Aspects of the legislation do...raise concerns about consistency with our international obligations, which is why we are in the process of discussing with Congress those issues,” Carney said. “We share the goal of the legislation in taking action to ensure that our workers and companies have a level playing field with China, including addressing the undervaluation of their currency.”
China’s foreign ministry spokesman Ma Zhaoxu earlier issued a stinging rebuke against the Senate’s decision, warning that the bill would leave trade relations between the two countries “severely damaged”.
ING strategist Chris Turner said China’s anger was uncharacteristically fierce: “Chinese authorities seem to be more concerned by this bill than any other over the last decade.”