Treasury report declines to name China currency manipulator

The US on Tuesday declined to name China as a currency manipulator although it remained critical of the Chinese government’s economic policies ahead of a planned visit to the country by US President Donald Trump.

The semi-annual US Treasury currency report said no countries deserved the currency manipulator label, but it kept China on a currency “monitoring list” despite a fall in China’s global current account surplus since 2016. The yuan also has strengthened sharply against the dollar this year, reversing three straight years of weakening.

“Treasury remains concerned by the lack of progress made in reducing the bilateral trade surplus,” the department said in the report. “China continues to pursue a wide array of policies that limit market access for imported goods and services.”

The US-China trade deficit stood at $34.9 billion in August.

Trump, who on the campaign trail blamed China for “stealing” US jobs and prosperity by cheapening its currency, had repeatedly promised to label the country as a currency manipulator on “day one” of a Trump administration, a move that would trigger special negotiations and could lead to punitive duties and other action.

Currency market analysts had not expected the Trump administration to take a hard line on the currency issue in the context of the North Korea tensions.

As in its previous report on currencies in April, the Treasury criticized China’s past efforts to hold down the yuan’s value. But it said more recent efforts by Beijing to prevent a sudden depreciation of the yuan had probably helped the US.