Many big U.S. industrial companies are counting on China’s economy to drive growth, a bet unsettled by Washington’s recent saber-rattling on Beijing’s closely managed currency.

But if chief executives are worried, they are keeping awfully quiet about it, which may reflect a fear of being seen as out of touch with American workers at a time when unemployment is near 10 percent, investors and academics said.

The Obama administration next month is due to issue a report that could label China a “currency manipulator.” Meanwhile, the U.S. Senate is weighing a bill that threatens to slap new tariffs on some Chinese goods if Beijing does not allow its yuan currency to rise in value from the level it has maintained since the global credit crunch flared in mid-2008.

Either move could prompt China to raise new barriers to its imports of big-ticket U.S. goods like airplanes and railroad locomotives. That would be a heavy blow to major U.S. multinationals, who are counting on Chinese demand to offset continued economic weakness at home and in Western Europe.

“If it comes down to a trade war with sanctions, which are hard to predict, you’d probably have some unintended consequences,” said Peter Klein, senior portfolio manager at Fifth Third Asset Management in Cleveland, Ohio.

United Technologies Corp , the world’s biggest maker of elevators and air conditioners, last year generated about 5 percent of its revenue in China, the world’s third-largest economy. At an investor briefing earlier this month, Chief Financial Officer Greg Hayes said that given the shaky U.S. and Western European economies, “the one bright spot is China.”

Shares of United Technologies, as well as fellow industrials General Electric Co and Caterpillar Inc could all be hurt if the U.S.-China trade soured. Expectations of robust sales to China are already built into share prices, said Klein.

At the same time, U.S. CEOs are reluctant to be perceived as standing up for China, Klein said. “They have nothing to gain from that.”

Reuters approached more than half a dozen major companies with significant business in China for this story but all declined to comment.

A decade ago, chief executives of companies from United Parcel Service Inc to State Street Corp spoke out publicly in favor of letting the world’s most populous nation into the World Trade Organization.

Were the United States to impose penalty tariffs on Chinese imports, Beijing would have many possible responses.

“One policy lever the Chinese have, but the Americans do not, is they can restrict the operations of U.S. companies operating in China,” said Yasheng Huang, a professor of international management at the Massachusetts Institute of Technology Sloan School of Management in Cambridge, Massachusetts. “There are not that many Chinese companies operating in the United States and the legal processes here are more complicated.”

Beijing would also likely target its purchases of American-made capital equipment.

“Airplanes would be an easy target, anything where there’s not a lot of shipments, not a lot of customers,” said Andrew Bernard, professor of international economics at Dartmouth College’s Tuck School of Business in Hanover, New Hampshire.

Tensions between the United States and China over the value of the yuan, which some economists argue is undervalued by as much as 40 percent, are not new. Senators Charles Schumer and Lindsey Graham first introduced legislation proposing tariffs to offset the allegedly low exchange rate five years ago. [ID:nN2396907]

But the dispute has intensified in recent weeks, with Beijing contending U.S. lawmakers were trying to make the world’s third-largest economy a “scapegoat” for troubles at home. The two countries have set a top-level May meeting to defuse strains. [ID:nLDE62L1BB]

Nobel Prize-winning economist Paul Krugman also waded into the debate, arguing in his New York Times column that the U.S. should consider slapping a 25 percent tariff on Chinese imports to offset the un