US Commerce aide warns against China currency bill

WASHINGTON, Jan 30 (Reuters) - Congress will fuel U.S. inflation, invite trade retaliation and create a legal and administrative nightmare if it requires the Commerce Department to slap duties on Chinese goods to offset an undervalued currency, a top Commerce Department official said on Wednesday.

"China is the single-largest supplier of inexpensive products purchased by American consumers," Commerce Under Secretary for International Trade Chris Padilla said in remarks prepared for delivery at the Center for Strategic and International Studies.

"In this time of economic uncertainty, as Congress and the administration work together to stimulate growth, it would be very unwise to pass legislation that could inflate consumer prices" by slapping duties on Chinese imports, Padilla said.

U.S. lawmakers have complained for years that China's currency is undervalued by as much as 40 percent, allowing Chinese companies to undercut prices in the United States and making it harder for U.S. companies to make sales in China.

(Reporting by Doug Palmer; Editing by Andrea Ricci)