A bill that aims to punish Beijing for holding down its currency passed the Senate on Tuesday despite a warning from China that the legislation could plunge the global economy into a 1930s-like depression.

The legislation passed the Democrat-led Senate with a comfortable 63-35 majority, with several Republican senators also supporting the bill. The vote could set up a tussle with the House of Representatives, whose Republican leaders have called the bill “dangerous” and so far have refused to schedule a vote on it.

Max Baucus, chairman of the Senate finance committee, said it was just one of several ways in which China broke world trade rules. “This bill sends an important message to China,” he said. “China must stop flouting the rules, and ending its currency manipulation is one important step in that process.”

But in a commentary just hours ahead of the vote, China’s official Xinhua news agency raised the level of its recent rhetoric in opposing the bill, saying the proposed US legislation was reminiscent of the Smoot-Hawley tariff act in 1930 that is widely credited with worsening the Great Depression.

The bill will seek to put pressure on countries that the US determines are deliberately misaligning their currencies. The law would require estimates of such undervaluation to be included in so-called “countervailing duty” tariffs that Washington imposes on imports it deems to be unfairly state-subsidised.

The US legislation in its current form is unlikely to pass the House and become law in the near future. But trade experts think there is a good chance that some version of the legislation will eventually be passed, perhaps early next year.

The White House has questioned whether the bill would survive legal challenge in the World Trade Organisation – an issue on which trade lawyers are divided. On Tuesday, Eric Cantor, House Republican leader, said it was “critical” that the administration state clearly whether it supported or opposed the bill.