U.S. Senate passes bill targeting Chinese currency

The U.S. Senate has passed a bill that could bring sanctions against China or any country found to be deliberately manipulating the value of its currency.

The measure would open the door for U.S. sanctions if the Treasury Department finds a country is manipulating its currency and not taking steps to fix it. It also would make it easier for U.S. companies to seek tariffs on foreign imports.

Many U.S. lawmakers say Chinese currency manipulation gives its goods an unfair advantage on world markets by making U.S. products too expensive. Opponents to the bill say they fear it could start a trade war with China.

China calls the bill a serious violation of World Trade Organization rules. The official Xinhua news agency said the bill may ignite a trade war. Beijing denies deliberately undervaluing the yuan. It says it is taking steps to let its value rise and fall naturally against the dollar.

The bill now goes to the House of Representatives, where passage is uncertain. Republican Majority Leader Eric Cantor is asking the White House to take a formal position on the bill before the House considers it.

President Barack Obama has not officially come out for or against the measure. But the White House says it wants to be cautious and make sure any new law does not violate World Trade Organization rules.

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