Harder on Russia and softer on China, Trump's views evolving
- Author: Leroy Wright Apr 17, 2017,
Apr 17, 2017, 0:57
This is a huge turnaround from Trump's rhetoric during his campaign past year where he raised the possibility of labeling Korea and other major trading partners including China, Japan and Germany as currency manipulators, which could have led to regulatory actions that would hamper imported goods from these countries.
The department also kept China, Japan, South Korea, Germany and Switzerland on the list.
Both China and the United States have the opportunity to do well if they further open investment and trade to each other, former US Secretary of the Treasury Jacob Lew said Friday.
It acknowledged that China had recently been propping up the value of its renminbi currency, which benefited American exporters, and hoped it would be a long-term move.
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".
Coinciding with this new assessment was Trump's announcement that he won't declare China a currency manipulator.
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 US$49.6 billion (RM218 billion), and cited China's market protection as an impediment to a balanced trade relationship. Declaring a country a manipulator would set off a process including negotiations that could culminate in punitive trade sanctions on the offender.
Trump signalled this week in an interview that he was reversing his position, and he has taken a less confrontational stance towards China since meeting with President Xi Jinping this month.
Trump did say he thought the dollar was "getting too strong" - a comment that sent the USA currency falling, though it subsequently rebounded.
Although Beijing has allowed the yuan to slowly appreciate in recent years and actively fought depreciation recently, .
Previous administrations have used three factors to determine if a country is a currency manipulator - a trade surplus with the US of more than $20 billion; a current-account surplus totaling more than 3% of its gross domestic product; and repeatedly devaluing its currency by buying foreign assets that equals to 2% of output a year.
Though Russia critics welcomed Trump's newly hardened tone, there's less enthusiasm from America's allies in Asia, who fear the US could overlook China's more aggressive posture toward its neighbours.
It is the third time that Taiwan has been on the list in the twice-yearly report since the United States began including it in April a year ago.
Schumer also said that the best way to get China to cooperate on North Korea was to be tough on them with trade, which is first thing the Chinese government "cares about".
The report urged Germany to take policy steps - particularly greater use of fiscal policy - to encourage stronger domestic demand growth, which would place upward pressure on the euro's nominal and real effective exchange rates and help reduce its large external imbalances.