Lawmakers threaten action against China if it doesn't follow through on currency pledge

Top lawmakers threatened to proceed with legislation to allow the U.S. to impose tariffs against Chinese goods due to that country's currency manipulation.

A number of top figures in Congress who have been pushing for China to allow the yuan to appreciate in value expressed measured skepticism toward the Chinese central bank's announcement this weekend that it would allow more flexibility in exchange rates.

"This vague and limited statement of intentions is China's typical response to pressure," Sen. Charles Schumer (D-N.Y.) said in a statement. "Until there is more specific information about how quickly it will let its currency appreciate and by how much, we can have no good feeling that the Chinese will start playing by the rules."

"We hope the Chinese will get more specific in the next few days," Schumer added. "If not, then for the sake of American jobs and wealth, which are hurt every day by China's practices, we will have no choice but to move forward with our legislation."

Schumer has been the foremost advocate of legislation in the Senate that would allow the U.S. to act against China's currency manipulation, which pegs the value of the yuan to the value of the U.S. dollar. The Chinese policy is meant in part to maintain existing trade balances with the U.S. and other nations that have helped enrich the Chinese economy over the past decade.

President Barack Obama and Treasury Secretary Tim Geithner welcomed the news much more openly, and said they would discuss the details of the more flexible exchange rates at next week's G-20 summit in Canada.

Other top lawmakers were more measured.

"This is a positive first step, but it remains to be seen whether this move will be more symbolic than significant. The significance of this policy will depend on how much the Government of China allows the renminbi to appreciate over time," said House Ways & Means Committee Chairman Sander Levin (D-Mich.).

"We have seen actions like this before and it is clear that China did not allow enough appreciation the last time it adopted a policy like this one, from 2005-2008.  If China takes that same approach again, the United States will still need to take action," Levin said, echoing Schumer's threat.

Sen. Chuck Grassley (R-Iowa), the ranking member of the Senate Finance Committee, also called for more pressure on China.

“China’s announcement is long overdue," he said in a statement. "Congress and the administration need to keep the pressure on until China takes concrete actions to appreciate its currency exchange rate in a meaningful way.”