US Treasury Department Stops Short of Calling China a Currency Manipulator


Still, despite that reversal, the report said a decade of holding down the renminbi had imposed "significant and long-lasting hardship on American workers and companies" and left China with the largest trade surplus of any country against the United States - $347 billion past year.

Asian countries escaped the currency manipulator label in the latest US Treasury report, but remain wary of possible trade friction as President Donald Trump maintains his administration will seek to address trade imbalances.

The association said South Korea's trade surplus with the United States was caused by non-currency factors, not currency manipulation.

The reversal on branding China a currency manipulator is among several changes in which Trump has softened tough stances he had taken during the campaign. He publicly retreated from that position after meeting with Chinese President Xi Jinping in Florida last weekend.

On the topic of Trump's recent waffling on many platforms he held during his campaign, McConnell said that the felt Trump is still "learning the job".

Beijing has not intervened recently in markets to weaken the value of its currency - the third criteria - and in fact has tried to keep the renminbi from falling further amid the country's relatively sluggish growth rate.

However, the U.S. Treasury States did not name Taiwan as a currency manipulation nation in the report.

With a trade surplus in goods with the United States of US$347 billion (RM1.53 trillion) a year ago, and continued policies that restrict free trade, "Treasury will be scrutinising China's trade and currency practices very closely". China's $347 billion goods trade surplus with the USA was the largest of major trading partners a year ago, according to the report.

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This was the Trump administration's first release of the twice-yearly report, which evaluates the foreign exchange policies of major US trading partners.

Trump has said some USA trading partners, particularly China, manipulated their currency, but has since backed off that claim and acknowledged that China had not weakened the yuan to make its exports cheaper. "That's worth having not as good a trade deal as I would normally be able to make", he said.

The US had earlier listed China, South Korea, Japan, Taiwan, Germany and Switzerland as foreign-exchange manipulators and had kept then on its monitoring list - China by virtue of a massive trade surplus with the United States.

The report contains an implicit threat that unless China gives United States exporters greater market access and further rebalances the economy, the USA could act to rectify the trade imbalance, according to Eswar Prasad, former head of the International Monetary Funds China division.

"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 rise with market forces once appreciation pressures resume", the report says.

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

The checklist also includes Japan, South Korea, Taiwan, and Switzerland.