A confrontation between the United States and China over whether the Chinese are manipulating currency is in the imminent offing with neither side showing signs of backing down.

If the Treasury Department rules that China is, indeed, manipulating currency, sanctions are likely, which would greatly strain relations with China and could affect the workings of the UN Security Council where the two countries serve as permanent members - both with veto power. China often shows its opposition to resolutions backed by the United States by abstaining - but could likely veto similar measures in the future should it come to that.