Trump calls out China, EU over currencies

US president at odds with the findings of his own administration

In his quest to wrestle concessions from two of the America’s largest trading partners, the US president said they manipulate the yuan and the euro, despite his accusations being at odds with the findings of his own administration

President Donald Trump accused China and the European Union (EU) of manipulating their currencies as he tries to wrestle concessions from two of the US’s largest trade partners.

“I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” Trump said in an interview with Reuters published on Monday.

The president’s accusation, presented without explanation or substantiation in the Reuters report, conflicts with the findings of his own administration.

The Treasury Department stopped short of naming China, the EU or any other country as a currency manipulator in April, in a semiannual report on foreignexchange policy.

The US hasn’t officially accused another country of currency manipulation since 1994.

The dollar extended its drop to trade at the day’s low as measured by the Bloomberg Dollar Spot Index, while the euro rose to its highest level in more than a week at $1.1481.

In the April report, Treasury dialled up its criticism of China, citing lack of progress in rectifying its trade imbalance. The department said that China’s “disproportionate share of the overall US trade deficit” required “enhanced analysis” of whether it’s a manipulator, along with five other countries.

A designation requires the US to engage in expedited negotiations with the country.

China’s stock market has suffered declines and the yuan has been on a losing streak for more than a month. Chinese authorities, bracing for economic fallout, have introduced measures to support growth ranging from shifting toward a more accommodative monetary policy to boosting fiscal spending.

‘Little evidence’

“There is little evidence of more than scant Chinese foreign exchange market intervention,” Mark Sobel, a former US Treasury official who worked at the department for nearly four decades, wrote in a column published Monday by a London-based think tank, the Official Monetary and Financial Institutions Forum.

He cited a lack of evidence in China’s foreign reserve holdings data and other measures.