WASHINGTON, Sept 26: Two US senators leading a drive to punish China over its currency regime said on Tuesday they would decide in the coming days on whether to proceed with a punitive tariffs bill.

Democrat Charles Schumer and his Republican colleague Lindsey Graham spoke after meeting Treasury Secretary Henry Paulson for a briefing on Paulson’s trip last week to China.

Graham said that Paulson pressed the senators to shelve their bill, which would impose a tariff of 27.5 per cent on all of China’s exports to the United States unless it dramatically re-values its currency, the yuan.

The South Carolina Republican said the meeting was “very productive” but reaffirmed that the yuan was artificially undervalued by 15 to 40 per cent against the dollar, with “devastating” consequences for China's competitors.

Schumer, of New York, said: “We are deciding all of these things over the next day or two, and we’ll let you know when we’ve made a decision.”

China’s legion of critics in the US Congress argue that the yuan is massively undervalued against the dollar, lending an unfair boost to Chinese exports and driving thousands of US businesses to the wall.

But in his meetings with China's top leaders, Paulson pressed for a broader overhaul of the booming country’s economy and urged US critics to hold their fire.

Paulson clinched a new “strategic economic dialogue” with Beijing that is meant to thrash out the long-term challenges posed by China’s meteoric economic rise.

Administration officials say the Schumer-Graham bill has no chance of making it on to the statute book, given that November elections are looming and that there is no equivalent bill in the House of Representatives.

But the officials argue that a vote in favour of the widely backed bill would send a terrible message to America's trading partners that the world’s largest economy is shutting itself to outside business.—AFP