A wide coalition of US trade unions and members of Congress is stepping up ­pressure on President Barack Obama to confront China over alleged illegal currency manipulation that could have cost millions of American jobs.

The push comes ahead of a visit by the US treasury secretary, Tim Geithner, to Beijing next month to discuss trade issues. Against a background of rising job losses in the US, union leaders and members of Congress are backing a bill that threatens Beijing with punitive duties on its goods unless it changes its currency practices.

The low value of China's currency, the yuan, has been a point of friction between the US and China for more than a decade. Some economists, including Geithner, accuse China of deliberately keeping the value of the yuan low to make its export goods cheaper, undercutting US manufacturing and leading to US job losses.

Pressure on Obama is building in the US, partly because of the recession and partly because the president is viewed as more sympathetic to protectionist measures than his predecessor was.

One of the supporters of the new bill, Tim Ryan, a Democratic congressman, told the Guardian: "The bill is trying to bring some honesty into currency valuation. We are competitors but we want a level playing field. We need to have legal recourse."

Bob Baugh, director of the 10-million strong federation of unions AFL-CIO, who has been organising support of legislation, said: "It is time for China to seriously ­realign its currency."

He estimated that the Chinese yuan was undervalued by about 40%, which gave Chinese a huge export advantage, undercutting US products and jobs. He said the mood in the US was changing and that many members of Congress had been elected in November on a platform of trade reform.

The Bush administration avoided confrontation with Beijing over the currency issue but the Obama administration has adopted a more ambiguous approach.

Obama, on the campaign trail, promised to take a harder line with China's trade practices and Geithner, in January, accused Beijing of "manipulating" its currency and suggested a more aggressive approach by the US on the issue.

But, in the Treasury's biannual report published last month, the Obama administration softened the rhetoric and avoided declaring China guilty of currency manipulation. China denies the charge.

While Obama wants to fulfil his ­campaign promise, at the same time he recognises the need to maintain a good relationship with China, given its increasing economic strength. The US is also looking to China to work alongside it on a series of thorny international issues, such as the Iran nuclear standoff.

The unions have won the backing of senators and members of the house in their attempt to introducing the bill. Despite previous attempts over the last six years having failed, Baugh and other union leaders claim that bipartisan support is growing. The Republican senator Jim Bunning said: "American workers and businesses have been competing with both hands tied behind their backs for too long."

Debbie Stabenow, the Democratic senator from Michigan, added: "Our laws must provide mechanisms to cite countries for manipulating their currency and also provide remedies so US workers are not put at a competitive disadvantage."