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DES MOINES, Sept 29 (Reuters) - President Barack Obama said on Wednesday that China’s currency is undervalued and contributes to the U.S. trade imbalance with Beijing, as U.S. lawmakers looked poised to pass a measure threatening punitive tariffs on Chinese goods.
“The reason that I‘m pushing China about their currency is because their currency is undervalued,” Obama said in a backyard visit with an Iowa family.
Obama, responding to a question, acknowledged that many Americans believe Beijing was managing the yuan to keep its value artificially low to make Chinese exports cheaper while U.S. products sold in China were then more expensive.
“It’s a contributing factor to our trade imbalance,” Obama said.
The House of Representatives later on Wednesday was expected to approve, with bipartisan support, a bill to treat China’s exchange rate as a subsidy, opening the door to additional duties on Chinese goods entering the United States, some of which are already subject to special levies. [ID:nN28172488]
But the measure must gain Senate approval and be signed into law by Obama.
The White House has not taken a position on the bill, except to say it wanted to be sure it did not violate World Trade Organisation rules.
The House move, little more than a month before U.S. congressional elections, is certain to further roil relations with Beijing, which resents the criticism and says it is its decision alone how fast to proceed with currency reforms.
The Obama administration has stepped up pressure on Beijing over its currency, mindful of the need to show that the president and fellow Democrats are serious about anything that jeopardizes U.S. jobs in an election season when high unemployment and an anemic economy are voters’ top concerns.
Editing by Sandra Maler