Treasury Department designates China as a currency manipulator – By Sean Higgins (Washington Examiner) / Aug 5 2019
The Treasury Department announced Monday that it would designate China as a currency manipulator, reversing an earlier position by the Trump administration that Beijing’s actions didn’t meet the technical definition.
The announcement is latest ratcheting up in the trade war between the U.S. and Beijing, following President Trump’s announcement of new tariffs last week and China announcing Monday it would suspend purchases of U.S. agricultural good.
“Secretary (Steven) Mnuchin, under the auspices of President Trump, has today determined that China is a Currency Manipulator,” the Treasury Department announced. “As a result of this determination, Secretary Mnuchin will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.”
The 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. “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 announcement caped a tumultuous day in which Beijing’s Commerce Ministry announced that it had stopped buying U.S. agricultural goods. The announcement was a blow to U.S. farm industry, which previously counted China as a major buyer of products like soybeans. The Trump administration had previously promised $16 billion in support this year to the industry to offset losses from the trade war. The Dow Jones closed down 767 points, almost 3%, following the news.
Beijing’s move was in retaliation for the Trump administration’s decision last week to move forward with new tariffs on $300 billion worth of Chinese goods. The tariff announcement followed a trade meeting between the countries in Shanghai in which neither side budged from positions that caused earlier talks to collapse in May.
Earlier on Monday, President Trump had reiterated his belief that China was a currency manipulator. “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 tweeted.
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!
— Donald J. Trump (@realDonaldTrump) August 5, 2019
Despite Trump’s accusation, the Treasury had previously rejected the argument. “While the currency practices of six countries were found to require close attention, no major U.S. trading partner met the relevant 2015 legislative criteria for enhanced analysis during the period covered by the Report. Further, no trading partner was found to have met the 1988 legislative standards during the current reporting period,” the department said last year.
