Final answer:
If China allowed its currency to float, it could affect the U.S. trade balance with China by making Chinese exports more or less expensive and American imports cheaper or more expensive respectively.
Step-by-step explanation:
The U.S. trade balance with China would likely be affected if China allowed its currency to float. When a country's currency is allowed to float, its exchange rate can fluctuate based on market forces. If China's currency were to appreciate, it would make Chinese exports more expensive and American imports cheaper, potentially reducing the U.S. trade deficit with China. On the other hand, if China's currency were to depreciate, it could make Chinese exports cheaper and American imports more expensive, potentially increasing the U.S. trade deficit with China.