The renminbi weakened  today after the House Ways and Means Committee completed its two days of hearings on China’s currency policy.  The yuan, as the renminbi is informally known, had strengthened slightly in the days leading to the much-watched event in Washington.  Beijing manages the value of its currency to give an advantage to Chinese exporters.  Foreign analysts believe the renminbi is undervalued by at least 25%.

“A multilateral approach would be the most likely to yield the broadest results,” said Chairman Sander Levin during the hearings.  Some have argued that the U.S. should convene a working group inside the G-20 to persuade Beijing to allow market forces to influence the value of the yuan, and Levin has generally been in favor of this approach.  He had delayed scheduling hearings to give the Chinese an opportunity to allow their currency to appreciate against the dollar.

Yet they had remained firm, and Levin has evidently changed his mind, by no means ruling out drastic action.  “I’ll be working over the weekend, talking with colleagues and talking with leadership and decide by next step what is the appropriate next step,” he said at the conclusion of the hearings.  “There have been no decisions.

And what might the powerful legislator decide?  Levin’s committee may report out Representative’s Tim Ryan’s bill, which would authorize duties on Chinese imports in cases where U.S. companies suffer material injury due to currency misalignment.  That’s no surprise because Speaker Nancy Pelosi wants the House to consider a bill before adjournment.

Treasury Secretary Timothy Geithner, who had previously opposed Congressional action, implied this week that the Obama administration would support a bill that was both in compliance with America’s World Trade Organization obligations and effective in forcing a revaluation of the renminbi.  The White House is evidently recognizing that, by now, Congress has run out of patience.  In the Senate, for instance, Charles Schumer claims he has about 80 votes for his legislation, which would also impose tariffs on goods from countries with misaligned currencies.

So what will happen before Congress adjourns?  The Chinese evidently are not worried, probably because there is not enough time before the November elections to get a bill through both houses of Congress.  After all, if they were concerned, the yuan would be appreciating quickly.  As it is, their currency is getting even weaker.