A group of US lawmakers on Thursday (10 February) launched a new push for a bill that would give companies the ability to defend themselves against currency manipulation - with China the most likely target.

The Currency Reform for Fair Trade Act was approved in September last year by the House of Representatives, but it failed in the Senate.

The companion bills would enable US companies to defend themselves using countervailing duties or tariffs against countries that manipulate their currency. It is aimed at countries like China, which allegedly aligns its currency to the US dollar at a below market rate so that its goods are less expensive on international markets.

“We are confident that the new Congress will finish what the previous Congress started,” said Charles Blum, executive director of the Fair Currency Coalition (FCC).

“Action speaks louder than words. China clearly has no intention of reversing its illegal currency undervaluation anytime soon. That’s why Congress must enact currency legislation now. Every day of delay means more American jobs lost and more new job creation denied.”

Since the end of last September the FCC claims China’s foreign currency reserves have grown by an estimated $200bn and now total a staggering $2.9 trillion. Moreover, in nominal terms, the RMB has barely increased in value compared to the dollar, rising by just 4% since 21 June 2010. 

However, representatives for US apparel and footwear importers believes the legislation "primes the United States and China for a widening trade war" and that erecting additional trade barriers stifles US competitiveness in the global market.