Trump stops short of labeling China, Germany currency manipulators
- Author: Zachary Reyes Apr 20, 2017,
Apr 20, 2017, 17:57
"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 US trade partners.
In a semiannual report to Congress, the department kept Japan, China, South Korea, Taiwan, Germany and Switzerland on the so-called "monitoring list", saying the six economies warrant "close attention to their currency practices".
"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.
Still, despite that reversal, the report said a decade of holding down the renminbi had imposed "significant and long-lasting hardship on American workers and companies" and left China with the largest trade surplus of any country against the United States - $347 billion past year.
The United States has stopped short of branding China a currency manipulator, but urged the world's second-biggest economy to let the yuan rise with market forces and embrace more trade.
"China now has an extremely large and persistent bilateral trade surplus with the United States, which underscores the need for further opening of the Chinese economy to American goods and services, " as well as quicker reforms to boost household consumption, according to the Treasury report.
Trump's Treasury Department used the same standards for determining currency manipulation as those of the previous administration under President Barack Obama.
But U.S. policy is really directed at countries which sell large volumes of their own currency to lower its price - a practice that makes a country's exports relatively cheap on global markets, hurting American exporters.
In a statement, the Treasury said the findings and recommendations of the Report are meant to combat potentially unfair currency practices and support the growth of free and fair trade.
This was the Trump administration's first release of the twice-yearly report, which evaluates the foreign exchange policies of major US trading partners.
Also, Seoul's financial authorities intervened on the foreign exchange market throughout 2016 in order to ease a sharp depreciation of the local currency, selling $6.6 billion over the on-year period.
- Realized the U.S. Export-Import Bank is worth keeping around.
While Trump and Chinese President Xi Jinping last week agreed to 100-day trade talks, US business leaders in China have expressed concern about a lack of progress in gaining further access to the Chinese market despite years of negotiations.
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.
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.
The bank said it maintained effective channels of communication with USA financial authorities where both sides could express their opinions.
Trump declared on Wednesday that he'll back away from a campaign promise to name China a currency manipulator, a move that would have created friction between the world's largest economies as they try to boost trade cooperation and address North Korea's nuclear threat.
However, the report said that if there is upward pressure on the yuan in the future, China should allow the currency to appreciate according to market conditions.