Trump administration removes designation of China as currency manipulator
“China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability.”
The Treasury Department designated China on Aug. 5 after Beijing allowed the yuan to fall below an exchange rate of seven yuan to one U.S. dollar. Mnuchin announced China’s designation later that day. The administration argued that the country had taken steps to devalue its currency in order to gain an unfair advantage in international trade.
Treasury’s labeling of China as a currency manipulator caused shockwaves through financial markets, sending stocks tumbling over fears of a currency war. But tensions eased after China allowed the yuan to rise above the seven-to-one exchange rate, laying the groundwork for an October tariff cease-fire.
Currency issues will remain a key focus in trade negotiations even if Treasury reverses China’s formal condemnation. Trump and trade protectionists in both parties insist that China takes other discreet action to push down the value of the yuan while the U.S. dollar remains strong.
“China is a currency manipulator—that is a fact. Unfortunately, President Trump would rather cave to President Xi than stay tough on China,” said Senate Minority Leader Charles Schumer (D-N.Y.) in a statement Monday.
“When it comes to the president’s stance on China, Americans are getting a lot of show and very little results.”
Updated at 5:11 p.m.
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