Despite the Chinese Government’s warnings of a trade war, the Senate has moved toward approval of a bill designed to bring back jobs from China by targeting that nation’s currency. With 62 senators voting to end debate on the bill, it is all but certain to have the simple majority needed for passage. That vote is scheduled to occur this week.

The legislation ― S. 1619, the Currency Exchange Rate Oversight Reform Act, introduced by Senator Sherrod Brown (OH-D) ― would direct the Obama Administration to take action against China’s alleged manipulation of the value of its currency. The U.S. Treasury Department would be compelled to levy tariffs and other penalties against countries for having “misaligned” currencies. The measure reflects lawmakers’ concerns that China holds down the value of the yuan in an effort to boost the country’s exports. This weakness in the yuan means that U.S. exports cost more in Chinese markets while Chinese products sell for less in the United States ― giving Chinese companies a competitive edge.

“We have our clocks cleaned every day and lose jobs every day because of unfair Chinese practices,” Senator Charles Schumer (NY-D) said on the Senate floor.

The President has agreed, saying, “China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States. ” Yet the Administration has been reluctant to impose tariffs on China, suggesting that such action could violate U.S. international treaties on trade matters. A number of business groups have warned that Beijing could retaliate, undermining a U.S. economic recovery.

Support for the China currency legislation is building in the House, where 226 Members, including 61 Republicans, have signed onto a similar bill; however, Speaker John Boehner (OH-R) has called the measure “dangerous” and has vowed not to bring it up for a vote.

For more background on this issue ― including Obama Administration policies and China’s market reforms ― see the November 2010 International Debates on “China’s Currency Policy.”