US News & World Report says:

Analysis from Goldman Sachs, the former corporate home of Treasury Secretary Hank Paulson, thinks the House will most likely pass legislation in June that would allow duties to be applied to Chinese goods. Similar legislation will be introduced in the Senate that will at the very least force the Treasury Department to label the Chinese currency as "misaligned" and lead to further action.

There is little chance that China would permit the sort of rapid currency appreciation that would satisfy Congress. A perusal of official Chinese newspapers reveals a country fixated on the example of Japan, which, at U.S. urging, allowed its currency to appreciate dramatically. Not only did the strong yen worsen Japan's economic slump in the 1990s, but its trade deficit with the United States didn't improve.

The endgame here may be the passage of legislation that would assess an across-the-board tariff of 20 percent on Chinese goods. (A similar bill has been proposed in the past, but the GOP leadership quashed it.) My source believes such a bill would pass today with vetoproof majorities.

To read more:

http://www.usnews.com/usnews/biztech/capitalcommerce/070524/free_trade_under_siege.htm