In the meantime, the administration's economic team is looking at alternative strategies, said the two people, both of whom work within the administration. The effort includes not only Treasury, but also the Commerce Department, National Economic Council, National Trade Council and the office of the U.S. Trade Representative, one of the officials said.

President Donald Trump promised to label China as a currency manipulator on Day One of his presidency but has not done so. That process is actually directed by the Treasury Department, which is not slated to release its official analysis of international currency until later this spring. Even then, many analysts are skeptical that the administration would take the aggressive step of slapping China with such a label.

It's an effort to fulfill the president's campaign pledge to crack down on what he frequently called unfair trade.

The Trump administration is assessing the scope of its power to penalize countries whose currencies it believes are undervalued, according to two people with direct knowledge of the review.

One source said one law that has garnered particular attention is the Trade Enforcement and Trade Facilitation Act, which was enacted during the final months of President Barack Obama's administration. It was intended to act as a check on separate legislation that gave Obama broad latitude to negotiate the Asian trade deal known as the Trans-Pacific Partnership. Critics of TPP argued that it did not sufficiently protect against currency manipulation.

The Trade Enforcement and Trade Facilitation Act details several consequences for nations that have devalued their currency and have large current account surpluses. It allows the president to block future federal contracts with those countries and to choke off government financing for U.S. businesses seeking to invest there. The law also calls for pressuring the International Monetary Fund for heightened surveillance and for currency valuation to be considered in trade negotiations.

Gary Hufbauer, a senior fellow at the Peterson Institute of International Economics, said China and other nations could be cited for currency misalignment — in other words, having large trade surpluses, especially with the United States. National Trade Council Director Peter Navarro, a longtime critic of China, highlighted his concern over America's trade imbalance during a speech earlier this month.

"It's clear that the Chinese currency is undervalued," he said at an economics conference in Washington. "It's also clear that historically, the Chinese have taken aggressive policies to make sure the currency is undervalued."

Hufbauer said the administration could seek changes to Commerce regulations that would allow it to impose fines on countries whose currencies are found to be misaligned. However, Hufbauer questioned whether such measures would stand up in U.S. and international courts.

Major U.S. manufacturing industries, such as steel companies, have pushed for relief from what they say is China's heavy-handed intervention in currency markets. But many economists warn that labeling China a currency manipulator could spark retaliation from the world's second-largest economy.

"China is likely to take overt as well as covert retaliatory actions, that could include restricting American companies' access to markets and investment opportunities in China, as well as disrupting the supply chains of U.S. businesses that rely on Chinese intermediaries," said Eswar Prasad, a trade professor at Cornell University. "The U.S. economy, especially U.S. multinational corporations that operate in China in one form or another, could suffer significant collateral damage if an open trade war were to break out."

To be labeled a currency manipulator, China would need to meet three rigorous requirements: a U.S. trade surplus of more than $20 billion, a current-account surplus of more than 3 percent of its economy and purchases of foreign assets totaling more than 2 percent of GDP.

The last analysis by the Obama administration found that China met only the standard on bilateral trade.