Trump administration declines to brand China a currency manipulator
- Author: Leroy Wright Apr 17, 2017,
Apr 17, 2017, 22:36
But the semi-annual US Treasury currency report maintained the six countries on a "monitoring list" - China, Japan, Germany, South Korea, Taiwan and Switzerland.
U.S. President Donald Trump's administration declined to name any major trading partner as a currency manipulator in a highly anticipated report on Friday, backing away from a key Trump campaign promise to slap such a label on China.
Only when Taiwan meets just one of the three criteria for two USA currency reports in a row, it will be removed from the monitoring list, the central bank said.
Economists and business leaders had said that China wasn't manipulating its currency. China has burned through nearly $1 trillion of its foreign reserves, or about a quarter of the total stockpile, since mid-2014 to help support the currency.
During his presidential 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.
During the campaign, Trump had repeatedly called China a manipulator, saying, "They're killing us" by devaluing their currency to make it harder for American companies to compete against Chinese products. The designation requires intensive talks between the United States and the designated country and can lead to penalty tariffs imposed by the United States.
South Korea met only two out of three criteria to become a currency manipulator - trade surplus, current account surplus and market intervention.
Harry Yen (顏輝煌), head of the local central bank's foreign exchange department, said that the bank has established an effective communication channel with the U.S. Treasury and will express its opinions about the department's concerns over the New Taiwan dollar and U.S. dollar exchange rate.
To Garrett, branding China as a currency manipulator is one of several misleading observations about Chinese economy by Americans, along with the hype about the slowdown of Chinese economy and the overemphasis on the US trade deficit with China.
It also said that the U.S. remained poised to act if China did start to meddle with its currency, as it did in the not-too-distant past. Its surplus with the United States totaled $65 billion previous year.
Data from the U.S. Department of Commerce showed Washington's goods trade deficit with Beijing reached 347 billion dollars in 2016, significantly higher than that of other U.S. trade partners. "It's a clear statement to the Chinese that they need progress".
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.
Peter Navarro, the head of Trump's new National Trade Council, in January accused Germany of using a "grossly undervalued" euro to hurt the US economy. Trump dismissed America's Russian Federation hawks as "stupid people or fools" and predicted under his leadership that the Cold War foes would "work together to solve some of the many great and pressing problems and issues of the world".
The Trump administration is hoping that China will help rein in North Korea in exchange for other considerations.