If China does not act soon to raise the value of its currency, the Congress could pass legislation aimed at forcing Beijing to act, a top Democratic lawmaker said on Wednesday.
U.S. "patience has run out" after seven years of pressing China for currency reform, House Ways and Means Committee Chairman Sander Levin said at the start of a hearing on China's trade and industrial policies.
Levin's remark reflects frustration that China has not taken advantage of a window to revalue its currency that U.S. Treasury Secretary Timothy Geithner opened in April, when he delayed a semi-annual report on whether China or any other country was manipulating its currency for an unfair trade advantage.
"The administration constructively set the G-20 meeting as an important juncture for China to change its inflexible currency practices," Levin said, referring to next week's Group of 20 leaders meeting in Toronto.
"If China does not act, and the administration does not respond promptly thereafter, the Congress will act," Levin said.
Levin has been a moderating force in recent months on the currency issue as Democratic Senator Charles Schumer and several of his colleagues have pushed for a bill that would allow the United States to use countervailing duties against countries with "fundamentally misaligned" exchange rates.
In prepared testimony for the Ways and Means Committee, John Frisbie, president of the U.S.-China Business Council, warned such an approach would probably run afoul of World Trade Organization rules.
"We strongly recommend against this approach, even though we support the goal of seeing China's exchange rate move more quickly to reflect market influences," Frisbie said.