New York (CNN) -- The world's two biggest economies are facing off over tensions that could ignite a trade war and lead to a catastrophic split between the United States and China, says analyst Fareed Zakaria. President Barack Obama says an undervalued currency is giving Chinese companies an unfair advantage in selling products, and this week the House of Representatives passed a bill that would let the United States put tariffs on goods from China. China has retaliated against earlier trade sanctions by the United States and strongly opposes the bill passed by the House. "One has to hope a lot of it is bluff because the consequences of a significant trade war between China and the United States would be very dramatic," Zakaria said. "We need the Chinese to still have enormous faith in the U.S. economy, not just to buy Treasury bills, but to maintain all the links they have with the U.S. economy."
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President Obama has warned of dangers of undervalued Chinese currency
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House passed bill to allow tariffs against nations that undervalue currency
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Fareed Zakaria says U.S. and China both benefit from cheap Chinese currency
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Zakaria conducted rare interview with China's prime minister, Wen Jiabao, airing Sunday, 10 a.m. ET
The second thing is that these Chinese goods that are now cheaper are bought by Americans and @placeholder benefit enormously from cheaper goods.