China took steps Friday to let its currency trade more freely against the dollar and to cool its sizzling economy ahead of talks in Washington over Beijing’s soaring trade surplus.

China eased controls on the yuan amid pressure from the U.S. and Europe, but cautioned against expecting sharp increases in its value. The U.S. responded that Beijing is not moving fast enough to allow its currency to strengthen and help reduce its growing trade gap with China.

The Chinese government also raised interest rates for the second time in just over two months and tightened bank credit to slow its economy.

American officials are pushing Beijing to raise the yuan’s value in hopes that will help cut the multibillion-dollar U.S. trade deficit with China by making Chinese goods more expensive.