China’s Ministry of Commerce said the currency bill passed Wednesday by the US House of Representatives violates WTO rules, Reuters reported. The bill, which would still need to pass the US Senate and be signed by President Obama before becoming law, would categorize “fundamentally undervalued currencies” as an export subsidy and thus allow US companies to apply for duties against Chinese competitors. While there is strong support for the bill in some sectors of the US government, its passage is by no means guaranteed with elections just over a month away. Some fear that China could respond in kind to significant duties in relation to the renminbi. Obama has previously stated a desire for China to let its currency appreciate, but his signature is not seen as a given on a law that could potentially start a trade war between the two countries.
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