WASHINGTON: A day after the US Senate passed legislation to punish China for its alleged currency manipulation, House Speaker John Boehner signaled Wednesday he would block the bill to prevent a "trade war."
"Given the volatility in the world markets, given the uncertainty about the world economy, for the Congress of the United States to be taking this step at this moment in time poses a very severe risk of a trade war," he said.
Boehner's comments came as he faced mounting pressure to bring up the bill in the House of Representatives, where enough of his fellow Republicans have joined Democrats in backing the proposal that it would likely pass.
The bill, powered by a tide of US voter frustration at a sour economy and high unemployment ahead of November 2012 elections, envisions retaliatory duties on Chinese exports if the value of the yuan is unfairly "misaligned."
Beijing has denounced it as "a ticking time-bomb" that threatens to blow up economic ties between the economic superpowers, parts of the US business community opposed it, and the White House has criticized it.
The speaker said he was "concerned" about China's currency policy but signaled those worries were outweighed by "grave concerns" that the measure could trigger a destructive economic feud between the two economic superpowers.
And, in an apparent bid to shift the volatile issue to the White House, Boehner pushed President Barack Obama to take a formal position on the legislation.
"While the president is out campaigning instead of governing, it'd be nice for the president of the United States to make clear what his position is on this China currency bill," he told reporters.
Obama has accused China of "gaming" international trade rules in a way that hurts the US economy but said the bill could fall afoul of Washington's international trade obligations.
But the president, his bid weighed down by the sagging US economy and 9.1 percent unemployment, is caught between wanting to look tough on China and hoping to avert a trade war that could makes things worse.
"He's in a bit of an awkward position," said Democratic Senate Budget Committee Chairman Kent Conrad, who told AFP Obama was "probably wise" to have sought a middle course.
Doing so allows the White House "to keep their powder dry for other negotiations" with China and could provide leverage to get Beijing to let its currency rise against the dollar, he said.
Many in Washington agree that China keeps the yuan unfairly low against the dollar, giving its goods an edge of as much as 30 percent over similar US products, widening the trade deficit and costing American jobs.
But the measure's opponents, stressing the bill's toll on China ties, also warn that a rise in the yuan would boost manufacturing and jobs in countries such as Vietnam or Malaysia -- and not in the United States.
The US legislation's backers, an unusual coalition of Democrats and Republicans, have said it is time for Washington to take on Beijing, and predict a boost in the yuan will make Chinese workers wealthier and more likely to buy US goods, thus creating jobs and narrowing the trade gap.
House Ways and Means Committee Chairman Dave Camp, a Republican whose panel has jurisdiction over taxes and trade, said he would hold hearings "this month" on some of Beijing's most criticized trade practices.
Camp told reporters the session would take up the issue of rampant intellectual property theft in China, as well as Beijing's "indigenous innovation" policy of favoring local firms for government contracts.
"We have a complex relationship with China, an important relationship with China, and much more than just the China currency issue," said Camp, who promised "a multifaceted, thoughtful approach."
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