Trump admin. declines to brand China a currency manipulator

Guillermo Lane
April 18, 2017

China is the largest source of the US trade deficit, and Trump has previously criticized China for unfairly devaluing its currency to give it an unfair competitive advantage in worldwide markets.

"Expanding trade in a way that is freer and fairer for all Americans requires that other economies avoid unfair currency practices, and we will continue to monitor this carefully", he said in statement.

The last report released in October found that six countries - China, Japan, Korea, Germany, Taiwan and Switzerland - met two of the three criteria.

Trump said on Twitter.

Beijing has not intervened in markets to weaken the value of its currency - the third criteria - and in fact has tried to keep the renminbi from falling further amid the country's relatively sluggish growth rate.

The report came after China data showed its surplus with the United States was almost unchanged in the first quarter compared to a year earlier at $49.6 billion, and cited China's market protection as an impediment to a balanced trade relationship.

Treasury Secretary Steven Mnuchin said ensuring a level playing field for USA businesses is an "essential component of this administration's strategy".

Treasury hasn't branded any nation a currency manipulator — a highly charged assertion — since the Clinton administration labeled China as such in 1994.


Designating a country as a currency manipulator doesn't immediately trigger any penalties, but it is seen by other governments as a provocation.

Trump has projected a transactional attitude toward China, saying in interviews and remarks that he planned to use trade as a negotiating tool for Xi's cooperation on North Korea.

The administration's first report to Congress on foreign exchange policies of United States trading partners continues the stance of the Obama administration, putting those and four other countries on a watch list, though using a much tougher tone.

Trump's Treasury took the same route as the Obama administration did previous year, putting Germany and China on watch for potential problems.

"The basic message is that Japan needs to expand its domestic demand and one can read this as them telling Japan to import more American goods", said Minami of the Norinchukin Research Institute.

"They're not currency manipulators", Trump told The Wall Street Journal, explaining Beijing had not manipulated the yuan for months.

Trump did say he thought the dollar was "getting too strong" — a comment that sent the USA currency falling, though it subsequently rebounded.

The report has traditionally been used as a diplomatic tool to prod other countries whose currency policies were deemed a threat to USA industries.

Other reports by TheDigitalNewspaper

Discuss This Article

FOLLOW OUR NEWSPAPER