US President Barack Obama said today that China's currency is undervalued and contributes to the US trade imbalance with Beijing.
He made his comments as US lawmakers looked poised to pass a measure threatening punitive tariffs on Chinese goods.
Obama acknowledged that many Americans believe Beijing was managing the yuan to keep its value artificially low to make Chinese exports cheaper while US products sold in China were then more expensive. 'It's a contributing factor to our trade imbalance,' he said.
The House of Representatives later this evening was expected to approve, with bipartisan support, a bill to treat China's exchange rate as a subsidy, opening the door to additional duties on Chinese goods entering the US, some of which are already subject to special levies.
But the measure must gain Senate approval and be signed into law by Obama.
The White House has not taken a position on the bill, except to say it wanted to be sure it did not violate World Trade Organisation rules.
The Obama administration has stepped up pressure on Beijing over its currency, mindful of the need to show that the president is serious about anything that jeopardises US jobs amidst high unemployment levels.
