Major US trade associations warned Tuesday that US legislation to punish China over its allegedly undervalued currency could spark a "counterproductive" trade feud that could cost US jobs.
The US Chamber of Commerce and 35 other trade groups, many with sizeable holdings in China, told top lawmakers in a letter that they shared the goal of pressuring Beijing to let the yuan's value be decided by markets.
But "this legislation will do more harm than good to job creation and economic growth at a time when we need both dearly," they told Democratic House Speaker Nancy Pelosi and Republican House Minority Leader John Boehner.
The message, which also went to Democratic House Majority Leader Steny Hoyer, came on the eve of a House of Representatives vote on the legislation five weeks before November elections shaped by anger at high unemployment.
If the measure clears the House, the Senate could take up a companion bill after the elections.
US lawmakers frequently accuse Beijing of killing US manufacturing jobs by keeping the yuan -- and therefore Chinese exports -- artificially cheap.
The bill would expand the powers of the US Commerce Department by allowing it to impose tariffs when another nation is found to be manipulating its currency's value.
But "unilateral legislation, which seeks to increase tariffs on imports from China, is unlikely to incentivize China to move expeditiously to modify its exchange policies," the trade associations said.
"Rather, it would likely have the opposite effect and could engender retaliation against US exports into the Chinese market, currently the fastest-growing market for US exports," they said.
"Passage of this legislation is counterproductive not only to the goals related to China's exchange rate that we all share, but also to our nation's broader goals of addressing the many and growing challenges in the US-China economic relationship," they warned.
They cited rampant intellectual property violations, curbs on market access, liberalization of China's financial services sector, and worried the eyes of the world would focus on "US unilateral action" and not the underlying issues.
