WASHINGTON — The Senate voted Tuesday to threaten China with higher tariffs on Chinese products made cheap through an artificially undervalued currency, which lawmakers blame for destroying American jobs. The House, though, is unlikely to take up the bill, which some American businesses warn could trigger a trade war.

The 63-35 vote showed a broad bipartisan consensus that it is time to end diplomatic niceties with China and confront it over its aggressive trade policies.

“There are always people who don’t want to stand up to China and I think they are, frankly, undercutting our ability to stop the hemorrhaging in our manufacturing jobs,” said Sen. Sherrod Brown, D-Ohio.

“I understand that some on Wall Street don’t like this bill,” said Sen. Jeff Sessions, R-Ala. “They are wrong about this.”

GOP Sens. Susan Collins and Olympia Snowe of Maine both voted for the bill. Snowe is a co-author, with Brown, of a key part of the bill, requiring the commerce department to treat currency undervaluation as a “prohibited export subsidy,” which would allow the federal government to impose tariffs on subsidized exports from countries that violate the rules.

The vote “marks a monumental day in the United States Senate,” Snowe said. “This is the first time this body has passed comprehensive legislation to shed light on allegations of currency manipulation and empower our government with the tools necessary to take action on behalf of American workers.”

Still, the bill could die in the House, where a companion measure has the sponsorship of more than half the members but lacks the support of the GOP leadership.

House Speaker John Boehner, R-Ohio, like the many large multinational companies that oppose the legislation, has said it would be dangerous to dictate another country’s currency policies, and he can prevent the bill from ever being considered.

House Majority Leader Eric Cantor, R-Va., said Tuesday that the White House should make its position clear before the House acts.

The White House and President Barack Obama have not come out against the bill but have shown they are not comfortable with it, saying that they are concerned about any legislation that might violate international trade rules.

Advocates for the bill say it will make American goods more competitive and support more than 1 million new jobs. Critics warn that it will provoke Chinese retaliation and hurt Americans in one of their fastest-growing markets.

Regardless of the outcome, the debate and the vote are giving senators a chance to make clear to the Chinese their frustrations over trade policies that have seen China’s trade surplus with the United States go from $10 billion 20 years ago to $273 billion last year, delivering painful blows to U.S. manufacturers and their employees.

“This is a country manipulating its currency for an advantage in the export market,” said Sen. Lindsey Graham, R-S.C. “The Chinese manipulation of the yuan has cost this country at least 2 million jobs — 41,000 in South Carolina — and it is an unfair trade practice in another name.”

The vote came as Congress prepared to complete work on a package of free trade agreements that is also seen by their backers as removing barriers to American exports and promoting job growth.

Both the House and Senate are expected to vote today on trade agreements with South Korea, Colombia and Panama.

The Chinese currency, the yuan, is undervalued against the dollar by 25 to 30 percent, according to most estimates, with some economists putting the difference at up to 40 percent. That means that Chinese goods sold in the United States have a 25 to 30 percent price advantage, while U.S. items sold in China become that much more expensive.

MaineToday Media Washington Bureau Chief Jonathan Riskind contributed to this report.


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