Thursday June 23, 8:04 pm ET By Jeannine Aversa, AP Economics Writer Greenspan Says Tariffs on Chinese Products Would Harm Consumers and Not Protect U.S. Jobs WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan warned Congress on Thursday not to rush to impose punitive tariffs on imports from China, saying they would harm U.S. consumers and protect "few if any American jobs." It marked Greenspan's most blunt assessment to date that currency-related legislation that has attracted support from two-thirds of the Senate would harm the U.S. economy by driving up prices for the Chinese products Americans crave. He said a move toward protectionism in the world's largest economy could also unsettle global financial markets while doing little to protect jobs in this country. Some lawmakers want to impose hefty 27.5 percent tariffs on Chinese goods flowing into the United States if Beijing doesn't move to a more flexible currency system. American manufacturers contend Chinese currency is undervalued by as much as 40 percent, making that country's goods cheaper in the U.S. market and U.S. products more expensive in China. The Fed chairman said that any sales lost by China would just be made up by other countries in Asia and possibly Latin America who would be able to ship textiles, assembled computers, toys and similar products into the United States without facing the extra 27.5 percent tariffs. "Few, if any American jobs would be protected," he told the Senate Finance Committee. However, the prime sponsors of the legislation argued that Greenspan was wrong and the measure would have a positive impact -- especially if China agrees on its own to stop linking its currency, the yuan, to the U.S. dollar. Sens. Charles Schumer, D-N.Y., and Lindsey Graham, R-S.C., the prime sponsors of the legislation said it had provisions whereby President Bush could delay for up to two years actually imposing the 27.5 percent across-the-board tariffs if negotiations with the Chinese were making progress. Sponsors of the legislation said they expected to have a vote before the full Senate in July. However, even if it wins approval there, it is likely to face a tougher battle in the House and Bush would almost certainly veto the proposal. The measure did win 67 votes earlier this year in the Senate on a procedural motion, a surprisingly strong showing that was followed by tougher talk by the administration on the issue. Treasury Secretary John Snow began saying that China had taken all the preliminary steps necessary to allow more flexibility in its currency and should move immediately to make changes. The Chinese insist they still need more time to prepare their financial system for currency volatility. Several senators said the patience of Congress was growing thin. Democratic Sen. Debbie Stabenow from Michigan, a state where auto production has been hardhit by foreign competition, said an average of $2,000 was added to the cost of a mid-size American car sold in China because the yuan was so undervalued. Sen. Jim Bunning, R-Ky., said the Chinese have "told us to take a hike." While the administration in a May report to Congress did not brand China a "currency manipulator," Snow said Thursday that such a designation, which would trigger negotiations, could be made when Treasury must next report on the issue in October. "I think they are going to move," Snow said. "If they don't we would be left with little option." Snow said the administration's next trade challenges to Chinese practices would be determined after new U.S. Trade Representative Rob Portman completes a "top to bottom" review of all trade issues with China. Finance Committee Chairman Sen. Charles Grassley, R-Iowa, and Sen. Max Baucus of Montana, the top Democrat on the panel, released a joint letter in which they said Portman should pay particular attention to China's piracy of American intellectual property, Chinese barriers to the sale of American agriculture and service products and China's industrial policies.