A committee of the US Congress has approved a bill that would allow trade sanctions against China over the value of its currency.
The bill would allow the US to impose import duties on countries which have fundamentally undervalued currencies.
The US accuses China of holding down the value of its currency, the yuan, in order to give its exports an unfair price advantage.
House of Representatives Ways and Means Committee chairman Sander Levin said the yuan has a major impact on American workers and therefore American jobs.
The committee's approval of the bill means the House of Representatives will vote on the measure next week, but to become law it would also need Senate support, which the BBC says is less certain ahead of mid-term Congressional elections due in November.
The draft legislation would require the US Commerce Department to determine the extent to which a currency is undervalued in any case of unfair trade practices brought to it.
In August, the department decided to drop a more general investigation into the value of the yuan, despite deciding that China had unfairly subsidised its aluminium exporters.