Trump admin. declines to brand China a currency manipulator
- Author: Eleanor Harrison Apr 17, 2017,
Apr 17, 2017, 0:25
The US Department of Treasury yesterday concluded that no major trading partner of the US met the Congressional standards for currency manipulation in the second half of 2016.
The report showed the high priority the administration puts on addressing trade imbalances and said it would be "scrutinising China's trade and currency practices very closely".
During his presidential campaign, Trump repeatedly accused China of deliberately devaluing its currency to make it harder for American companies to compete against Chinese products.
China, Japan, South Korea and Taiwan remained on a list for special monitoring of currency practices, China by virtue of a massive trade surplus with the United States.
China now only meets one of the criteria, according to the report: a large trade surplus with the US.
Germany, along with Japan, South Korea, Taiwan and Switzerland were also on the "monitoring list" in the US Treasury report.
"China and Germany have been included in the list of the countries, whose currency manipulations will be observed by analysts of the TreasuryDepartment", they said.
On Saturday, the Trump administration officially declined to brand China a currency manipulator, in another major U-turn for the United States president, who had repeatedly pledged during his campaign to do so soon after taking office.
"They're not currency manipulators", he conceded in the Wall Street Journal interview, adding that he was concerned that officially branding them as such could jeopardize his talks with Beijing on confronting North Korea.
Lew said that China will benefit from increased U.S. investment in service sectors such as finance and insurance, while the United States could benefit from foreign direct investment from China, which helps create jobs.
The Treasury also warned that it will scrutinize China's trade and currency practices very closely and called for faster opening of China's economy to US goods and services and a shift away from exports to more domestic consumption.
However, in its report, the Treasury alleged that China has a long track record of engaging in persistent, large- scale, one-way foreign exchange intervention, doing so for roughly a decade to resist renminbi (RMB) appreciation even as its trade and current account surpluses soared.
Trump last week also said he has "great confidence that China will properly deal with North Korea".
The US president's son also said his father would not risk "the safety. of the world for a lunatic who is in power".
"The U.S. hasn't gotten anything from China yet", said Evan Medeiros, who was Obama's top Asia adviser in the White House.
The next report by the U.S. Treasury will be in October. "But the United States administration's focus on the trade deficit is something to keep an eye on", said Nobuyasu Atago, chief economist at Okasan Securities in Tokyo.
"After listening for 10 minutes, I realized it's not so easy", the president said after a discussion with Chinese President Xi Jinping that included his hopes that China's pressure could steer North Korea away from its nuclear efforts.