United States urges China to open trade, holds off on currency manipulator tag

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U.S. Treasury Department on Friday declared that no major trading partner of the U.S., including China, met the standard of manipulating its currency, while six economies were listed on its Monitoring List as their foreign exchange polices bear close monitoring.

In the Trump campaign's "contract" with American voters he promised, "I will direct the Secretary of the Treasury to label China a currency manipulator" in the first 100 days of his presidency.

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

The U.S. Treasury releases the Report on Foreign Exchange Policies of Major Trading Partners of the United States in a bid to implement the new provisions of the Trade Facilitation and Trade Enforcement Act of 2015, also known as the Customs Bill.

The other countries on the list are China, Japan, South Korea, Germany and Switzerland, with no country being identified as manipulating its exchange rate to obtain unfair trading advantages.

China was labeled a currency manipulator between 1992 and 1994.

In its report to Congress, the Treasury Department noted that Beijing had intervened in currency markets for about a decade to depress the value of its currency, the renminbi.

But U.S. policy is really directed at countries which sell large volumes of their own currency to lower its price - a practice that makes a country's exports relatively cheap on global markets, hurting American exporters.

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No countries were determined to have met all three of these criteria, but Japan, South Korea, Taiwan, Germany and Switzerland all met two of them.

"They're not currency manipulators", Trump told The Wall Street Journal in an April 12 interview, adding that China hasn't been manipulating its currency for months and that labeling China a manipulator could discourage the country from helping the United States with North Korea.

Dan DiMicco, the former boss of Nucor steel, said the president's efforts on trade and China were "all talk and no action".

All six countries had been named by Obama's Treasury Department as well.

Before the summit, Trump tweeted that the meeting would be a "very hard one" due to China's large trade deficit and the American jobs it had cost.

The move was apparently taken out of consideration for China, which the USA hopes will help rein in North Korea's nuclear and missile programs.

The Treasury report was being awaited with great interest until Wednesday, when Trump offered a preview in an interview with The Wall Street Journal.

Many economists have argued that the Chinese currency, RMB, has been at equilibrium level in recent years. He publicly retreated from that position after meeting with Chinese President Xi Jinping in Florida last weekend.

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