US Administration Talking to Senate About Yuan Bill

CNBC with wires
Chinese Yuan
John Woodworth | Photodisc | Getty Images

The Obama administration has begun discussions with the Senate about whether a bill aimed at forcing China to let its currency rise is "the right approach" to the long-running currency issue, a top U.S. official said Tuesday.

Acting U.S. Commerce Secretary Rebecca Blank told CNBC that the best solution to what American officials view as an undervalued Chinese currency remains "an open question," despite signs of bipartisan support for legislation that has raised angry warnings of a potential trade war from Beijing.

"The administration is talking with people in the Senate about whether this bill is the right approach or whether there are other approaches to take," she said. "Those conversations are under way."

Sen. Bob Corker, R-Tenn., and a member of the Senate Foreign Relations Committee, called the trade bill a "terrible piece of legislation."

"We've got a slowing economy, we have a financial crisis in Europe and now we want to create a trade war with the next-largest economy in the world," he said in a separate interview with CNBC Tuesday.

"I didn't even want to take this bill up. I think it's very, very poor policy and not well thought out," he said, adding he is "doing everything I can" to keep the bill from passing.

He said the "lack of will" to address such issues as tax and entitlement reform and deficit reduction "is leading us to find a bogeyman and to try to create other issues that, candidly, are just going to put us in an even further downward spiral."

-Reuters contributed to this story.