Trump administration says no United States trading partners manipulate currency

Gladys Abbott
April 21, 2017

U.S. President Donald Trump this week said in an interview that China hasn't been manipulating its currency for months, a sharp reversal from his campaign rhetoric.

In addition to Taiwan, the U.S. Treasury has also placed China, Japan, South Korea, Germany and Switzerland on the list.

"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.

Treasury hasn't branded any nation a currency manipulator - a highly charged assertion - since the Clinton administration labeled China as such in 1994.

"Expanding trade in a way that is freer and fairer for all Americans requires that other economies avoid unfair currency practices, and we will continue to monitor this carefully", Treasury Secretary Steven Mnuchin said in a statement.

Baku, Fineko/ The U.S. Treasury Department sent to Congress a document, changing the attitude towards China as a currency manipulator, despite Trump's pre-election promises.

Earlier this week, U.S. President Donald Trump reversed course on a promise that he had made both on the campaign trail and from the White House: that he would designate China as violating global exchange-rate rules, pushing down the yuan to gain a competitive advantage.

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During the campaign, Trump often claimed that China was manipulating the value of its currency to boost its exports, a policy that cost the United States manufacturing jobs. It also noted Korea's track record of "asymmetric foreign exchange interventions".

In fact, in recent years the Chinese government has intervened to prop up the currency, economists say.

The U.S. Department of Treasury has kept Taiwan on its currency monitoring list after Washington released its latest twice-a-year foreign exchange policy report on Friday. In a statement, the Treasury department said the findings and recommendations of the report are meant to combat "potentially unfair currency practices" and support the growth of free and fair trade.

Only when Taiwan meets just one of the three criteria for two USA currency reports in a row, it will be removed from the monitoring list, the central bank said.

"China will need to demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the RMB [renminbi] rise with market forces once appreciation pressures resume", the report said.

"Fixing trade imbalances will be an issue for the U.S. in its dialogues with China and Japan, while the manipulator threat has been put on the backburner", a Japanese government official told Reuters.

The department said Germany should take steps, notably spending policies, "to encourage stronger domestic demand growth, which would place upward pressure on the euro's nominal and real effective exchange rates and help reduce its large external imbalances". The provisions of the Customs Bill provide the US government with new monitoring tools and measures to address unfair currency practices.

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