Caterpillar Inc. CEO Jim Owens said Wednesday that protectionists in US Congress who want to "bully" China by imposing a tariff on Chinese imports risk serious global economic consequences if they succeed.

Speaking at a gathering of U.S. manufacturers, Owens called on lawmakers to stop bashing China over the U.S. trade imbalance and reject a bill to slap a 27.5 percent tariff on its goods if it doesn't halt what some call the manipulation of its currency to gain a trading edge.

Continuing the "scapegoating" of China, he said, ultimately could cause a worldwide recession.

"This anti-China sentiment could be extremely damaging if policy-makers on either side of the Pacific make a mistake, overplay their hand," he told the National Association of Manufacturers' annual convention. "It is time to curb the rhetoric and focus more on engagement."

Owens suggested the United States consider granting China market-economy status earlier than 2016 as planned. But he said such a move should be contingent upon it changing the way it regulates its economy, including better enforcement of intellectual property protections, a continued commitment to fair currency valuation and a greater reliance on market-based principles.

Caterpillar, the world's largest manufacturer of construction and mining equipment, has a growing stake in China and stands to lose significantly if U.S.-China trade relations fray and the Chinese apply punitive tariffs. In the past few years, it has more than doubled its Chinese work force and significantly expanded its sales there while increasing exports to that country by 40 percent.

But as a leading U.S. exporter, sending more than $9 billion in products abroad in 2005, its complaints are likely to resonate among other large manufacturers and be heard in Washington.

U.S. Commerce Secretary Carlos Gutierrez, who listened to Owens' remarks, reiterated the Bush administration's opposition to the tariff bill backed by Sens. Lindsey Graham, R-S.C., and Charles Schumer, D-N.Y.

"We need to deal with China through the executive branch, by continuing to engage them," he said in an interview with The Associated Press. "Legislation that creates a tariff in our country is not the way to do it. ... We have seen over the years, throughout our history, that legislation designed to be protectionist always backfires."

Despite the continuing loss of jobs, Gutierrez painted a bright picture for U.S. manufacturing in a speech.

"Productivity is strong," he said afterward when asked to elaborate on the reasons for his upbeat portrayal. "We've seen manufacturing growth over the past couple of years. More and more we are manufacturing products that are not easily copied, that have value added, and that's how we're able to compete with the rest of the world."