A US Senate vote to impose sanctions on China for its currency policy was put off on Thursday, delayed by the partisan divisions that have come to characterize this Congress.
The bill, which makes it easier to raise tariffs against Chinese goods if China keeps its currency "undervalued," is now set for a likely vote next Tuesday, when it is expected to pass with bipartisan support.
But partisanship ruled the day on Thursday when Democratic Senate Majority Leader Harry Reid and Republican leader Mitch McConnell couldn't agree on what amendments would be allowed, and Democrats used their majority powers to push through a rule change that restricts the offering of non-relevant amendments to legislation.
The China currency legislation, even if it passes the Senate, is still a long way from becoming law. House supporters of a similar bill say they have 225 co-sponsors, enough to pass it, but Republican House of Representatives Speaker John Boehner doesn't like it and could prevent it from reaching the floor for a vote.
He said this week that it was "pretty dangerous" to tell another country how to set its monetary policy.
The White House has remained noncommittal, but has emphasized the importance of working through international channels.
President Barack Obama said on Thursday it was "indisputable" that the Chinese "intervene heavily in the currency markets." He said China "has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States."
He said the Senate bill was an effort to get at these practices, but he stressed that whatever tools are put in place must adhere to international treaties and obligations.
The legislation is widely opposed by larger companies and groups that do business with China.
"Unilateral action will only serve to increase trade tensions and negatively impact the US economic recovery," Bruce Josten of the US Chamber of Commerce wrote to senators.
Erin Ennis, vice president of the US-China Business Council, said the Chinese could also react in more subtle ways, such as choosing European over American aircraft and picking fewer US companies for Chinese government procurement contracts.
She also questioned whether a fairer currency rate would bring jobs back to the US, saying that lower-wage countries such as Vietnam or Bangladesh would move in if Chinese goods become more expensive.