Trump pressured Mnuchin on labeling China a currency manipulator: report

Trump pressured Mnuchin on labeling China a currency manipulator: report
© Aaron Schwartz

President TrumpDonald John TrumpFlorida GOP lawmaker says he's 'thinking' about impeachment Democrats introduce 'THUG Act' to block funding for G-7 at Trump resort Kurdish group PKK pens open letter rebuking Trump's comparison to ISIS MORE reportedly pressured Treasury Secretary Steven MnuchinSteven Terner MnuchinTop economic adviser warned Trump on reelection chances ahead of China truce: report The Hill's Morning Report - Tempers boil over at the White House Schumer seeks focus on health care amid impeachment fever MORE to label China's government a currency manipulator earlier this month, escalating the trade war between the two countries.

The Washington Post reported Thursday that Trump ramped up his efforts to persuade Mnuchin to take the step after China allowed the yuan to weaken significantly against the dollar. Mnuchin had previously resisted making the designation, sources told the Post.

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Trump last week labeled the move a "major violation," and three sources close to Mnuchin told the Post that Trump's efforts culminated in the Treasury Department declaring China a currency manipulator later that day.

"China dropped the price of their currency to an almost a historic low. It’s called 'currency manipulation.' Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!" Trump tweeted last week.

In an Aug. 5 statement, the Treasury Department said Mnuchin made the decision "in auspices of President Trump" and pointed to public statements made by Chinese officials as evidence that its government was artificially devaluing the yuan.

"Secretary Mnuchin, under the auspices of President Trump, has today determined that China is a Currency Manipulator," the department said in a statement.

“In recent days, China has taken concrete steps to devalue its currency, while maintaining substantial foreign exchange reserves despite active use of such tools in the past,” Treasury said at the time. “The context of these actions and the implausibility of China’s market stability rationale confirm that the purpose of China’s currency devaluation is to gain an unfair competitive advantage in international trade.”

The International Monetary Fund has declined to concur with the U.S. designating China a currency manipulator.

One person close to Mnuchin told the Post that the intent of the designation was to coax Chinese negotiators back to the table for trade talks, though the source added that the strategy has not yet been successful.

Earlier this week, the White House trade office said the administration would delay the implementation of tariffs on certain consumer goods from China, from Sept. 1 to Dec. 15, while exempting other goods from the tariffs altogether.

The White House and Treasury Department did not immediately respond to requests for comment.

--Updated at 4:10 p.m.