The US will slap tariffs on Chinese twist ties, which are commonly used to seal bread bags and tie up cables.
The US said that China has been unfairly subsidising twist ties to the disadvantage of American producers.
This is the first time the US Commerce Department will impose tariffs to reduce the impact of China's currency.
The department said China's undervalued currency makes Chinese twist ties cheaper to US consumers, at the expense of its own producers.
"The Department of Commerce will continue to use the legal tools at our disposal to aggressively counter currency undervaluation and other unfair subsidies, further ensuring a level playing field for American businesses and workers," Commerce Secretary Wilbur Ross said in a statement.
The company that made the original complaint - Bedford Industries from Worthington, Minnesota - primarily makes twist ties that are used to package or reseal baked goods, coffee and vegetables.
Its products are mainly found in supermarkets across the US.
In a blog post from earlier this year, Bedford argued that the growing market share of Chinese producers would have been "unobtainable through fair competition".