The Trump administration will stop labeling China as a currency manipulator as a goodwill gesture to Beijing. The announcement comes two days before Beijing officials are due in Washington to sign “phase one” of a trade deal with the United States.
“China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability,” said Treasury Secretary Steven Mnuchin.
The administration officially designated China as a currency manipulator in August. The Treasury Department stated that China had a long history of manipulating its currency “through protracted, large-scale intervention” in exchange markets and had lately taken “concrete steps” to devalue it.
Trump has long accused China artificially adjusting the yuan’s value, making that an issue in his 2016 White House bid. “China is intent on continuing to receive the hundreds of Billions of Dollars they have been taking from the U.S. with unfair trade practices and currency manipulation. So one-sided, it should have been stopped many years ago!” he said in an August tweet.
Nevertheless, the administration resisted applying the label to China until last year, saying its actions didn’t fit the technical definition. That changed following a breakdown in trade talks between Beijing and the White House over the summer. China was labeled a currency manipulator the same day in August that Beijing’s commerce ministry announced that it had stopped buying U.S. agricultural goods.
The White House claimed in mid-December that it had reached a deal with Beijing on currency as part of the “phase one” agreement, but did not divulge the specific details.
Senate Minority Leader Chuck Schumer slammed the White House for the move. “China is a currency manipulator — that is a fact. Unfortunately, President Trump would rather cave to President Xi than stay tough on China,” he said.
