Trump administration officially declines to label China currency manipulator
- Author: Leroy Wright Apr 16, 2017,
Apr 16, 2017, 2:27
However, the Treasury Department did not name Taiwan as a currency manipulator, with the administration of US President Donald Trump declining to name any major trading partner as a currency manipulator.
During the campaign, Trump often claimed that China was manipulating the value of its currency to boost its exports, a policy that cost the United States manufacturing jobs.
The Trump administration has chosen not to brand China a currency manipulator in an official report, reversing one of the president's most prominent campaign promises on trade.
China, Germany, Japan, Korea, Switzerland and Taiwan remained on the monitoring list in the Trump administration's first report on currency values.
But in his interview with The Wall Street Journal, Trump said he had decided that China hadn't recently been manipulating its currency after all.
Trump hasn't named China a "currency manipulator".
He had promised to label the country a currency manipulator on "Day One" of his presidency.
The Treasury notified Seoul that it was closely monitoring its currency intervention practices.
Trump's policy reversal on China sends a signal to global finance chiefs ahead of next week's meeting in Washington, D.C., that Trump could soften the aggressive trade positions he staked out during his campaign.
"China has a long track record of engaging in persistent, large-scale, one-way foreign exchange intervention", the Treasury Department said in its semiannual report on the foreign-exchange policies of major USA trade partners.
No countries were determined to have met all three of these criteria, but Japan, South Korea, Taiwan, Germany and Switzerland all met two of them.
"It's a clear statement to the Chinese that they need progress".
Although Beijing has allowed the yuan to slowly appreciate in recent years and actively fought depreciation recently, its past interventions "imposed significant and long-lasting hardship on American workers and companies".
Economists say the USA currency could rise further as the Federal Reserve raises interest rates.
China now only meets one of the criteria, according to the report: a large trade surplus with the US.
He said China may not be manipulating their currency "at the moment because it doesn't suit their economic needs" but "make no mistake about it, as soon as the tide turns they will", he said, adding that the Trump has given them a "green light to steal our jobs".
Trump's dramatic reversal on China's currency follows a cordial meeting between the president and Chinese leader Xi Jinping at Mar-a-Lago on April 6 and 7. China's $347 billion goods trade surplus with the US was the largest of major trading partners a year ago, according to the report.
This was the Trump administration's first release of the twice-yearly report, which evaluates the foreign exchange policies of major USA trading partners.
Increased demand "would place upward pressure on the euro. and help reduce its large external imbalances", increasing domestic consumption, including of imported goods. The Treasury Department continued to call for reforms to the labor market that would improve Japanese workers' productivity, along with fiscal and monetary support for the Japanese economy.