WASHINGTON, May 11: The US government’s reluctance to get tough with China’s currency regime has left seething members of Congress threatening to take matters into their own hands.

In a twice-yearly report on global exchange-rate policies released on Wednesday, the Treasury Department said China was making “far too little progress” on changing a system that it said fosters dangerous trade imbalances.

But the report said China was not guilty under US trade law of manipulating its currency. And unlike last time, it issued no new warning for China to execute reform over the next six months or face the consequences.

Had China been designated by the Treasury, it would have triggered Sino-US consultations, bilaterally or through the International Monetary Fund, in a hazy procedure that might or might not lead to trade sanctions.

A trade war may yet erupt on other fronts if some in Congress have their way, however, especially given the feeling that the semi-annual Treasury joust with China has outlived its usefulness.

“The dodge that China has not met the ‘technical’ definition of manipulation will not satisfy Congress or the American people,” Democratic Senator Chuck Schumer said.

“We hope the Chinese will show greater movement than they have in the last few months, but it is looking more and more likely that, given the administration’s failure to act, our legislation may be the only way to get China to play fair in the global marketplace,” he said.

Schumer and Republican colleague Lindsey Graham said they were giving China another six months to stage meaningful reform of its currency or face a 27.5 Per cent tariff on all of its US-bound exports.—AFP