The Bush administration and members of Congress believe China (search) is likely to begin revaluing its currency in the coming months, Sen. Charles Schumer said Friday.

Schumer, D-N.Y., and Sen. Lindsey Graham, R-S.C. have delayed a bill that would impose penalty tariffs on Chinese imports if the Asian giant does not change its currency (search) system soon.

The senators met last month with Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan.

Schumer said Friday the lawmakers were told that China would soon change its current policy of linking the yuan (search) at a fixed rate to the dollar.

U.S. manufacturers contend that Beijings's practice of linking its currency to the dollar has undervalued the yuan by as much as 40 percent, making Chinese goods cheaper in America and U.S. products more expensive there.

"The reason that Graham and I delayed our bill is because the administration told us they thought there was a darn good chance China will begin the revaluation process in the next few months, and I said fine," Schumer said.

"Is there a guarantee? No, it is a likelihood," he said. "I believe it is a likelihood, and the administration believes it is a likelihood."

Tony Fratto, Treasury's chief spokesman, said Friday that Snow has not provided a specific timetable to the senators on when China will revalue.

"Secretary Snow did not provide an assurance on a specific time frame for when China would reform its currency regime. Targeting a specific date or time frame is counterproductive," Fratto said. "That said, it is clear that China is prepared to move now. It would be in the best interests of China, and the global financial system, if these reforms came sooner rather than later."

The timing of a change in currency policy may hinge on a September visit here by President Hu Jintao (search).

Schumer said he is ready to pull the trigger on his bill in October.

"If China does nothing, obviously we're going to move," he said.

The proposed legislation would impose across-the-board penalty tariffs of 27.5 percent on goods imported from China.

Some argue that a drastic across-the-board tariff could have a negative impact on both economies.

The National Trade Federation has warned that such a tariff would hurt U.S. consumers, and Greenspan has argued that it would save few if any jobs.

The Schumer-Graham legislation gained sudden attention after it gained 67 votes — two-thirds of the Senate — on a test vote this year.

Following that vote, the administration took a tougher line, saying China could move immediately to a more flexible currency system.

Snow has warned that if China does not act by October, the administration probably would brand it a "currency manipulator" in a report to Congress.

In the House, Rep. Mike Rogers, R-Mich., said he won't delay his own proposed legislation to pressure China on a trade and currency issues.

Rogers is seeking to bolster the enforcement of trade rules and require a tougher stance by the Bush administration toward Chinese currency manipulation.

"We have waited long enough," said Rogers.

"If we're going to be involved in worldwide trade, we are going to demand that you play by the rules," he said. "We won't allow you to cheat our economy and steal our jobs."

Chinese officials argue they must prepare their financial system to withstand the volatility of such a change.

Most experts expect China to try an interim step, such as linking the yuan to a number of currencies.