Trump may Call China a Currency Manipulator: Deutsche Bank
AlthoughUSPresidentDonaldTrump did not label China a “currency manipulator” on his first day in office as he said he would, a team at Deutsche Bank is not ruling out the possibility of him doing so going forward. “Some time in the next couple of weeks, we think it is likely that President Trump will declare China a currency manipulator and propose penalties if it does not enter into negotiations to lower its trade surplus with the US,” the team led by Michael Spencer, chief economist at Deutsche Bank, wrote in a note.
China has been trying to control the rate of its currency’s depreciation since 2014, and it has had a harder time keeping it stable in trade-weighted terms since mid-2016. The Deutsche Bank team noted: “While this intervention policy can indeed be described as ‘one-sided’ as proscribed by US law, it is intervention in the direction that would normally be viewed as in the US’ interest –– to prevent even faster depreciation of the Chinese currency.”
must have a significant bilateral trade surplus with the US. The country has a ‘material’ currency account surplus. The country is engaged in persistent one-sided intervention in the foreign exchange market.
There are three criteria that must be met for a country to be a currency manipulator by the Treasury Department: