US refrains from labelling China, others as currency manipulators
washington — The Trump administration again refrained from naming any major trading partners as currency manipulators on Friday, but the US Treasury’s semiannual currency report criticised China for the “non-market direction” of its economy and warned of global risks.
The report comes as the Trump administration pursues potential tariffs, negotiations and other restrictions to try and cut a massive trade deficit with China.
In the report, the US Treasury said it has added India to a monitoring list for extra scrutiny, while keeping China, Japan, Germany, South Korea and Switzerland on the list started in 2016 by the Obama administration.
The report did not mention President Donald Trump’s recent threats to impose billions of dollars worth of tariffs on Chinese goods over Beijing’s intellectual property practices, or pending Treasury investment restrictions on Chinese investment in the United States.
It said China’s yuan in 2017 on a trade-weighted basis was broadly unchanged against the dollar.
“The increasingly non-market direction of China’s economic development poses growing risks to its major trading partners and the long-term global growth outlook,” the Treasury said.
Treasury called for “further opening of the Chinese economy to US goods and services, as well as reducing the role of state intervention and allowing a greater role for market forces.”
Axel Merk, president and portfolio manager of Merk Hard Currency Fund in Palo Alto, California, said it was not surprising that Treasury did not name China a currency manipulator, saying that doing so is not the administration’s interest. “What labelling someone a currency manipulator means is handing over control to Congress to study the topic,” Merk said. “By not labelling them a currency manipulator, they can continue pushing China through the Executive branch.” — Reuters