The Atlanta Journal-Constitution
China no ‘currency manipulator’ now?
Two days before the scheduled signing for a trade deal, the Treasury Department has dropped China from a list of nations it alleges manipulate their currency values to gain an unfair trade advantage.
What’s happening
In a semi-annual report Monday, Treasury officials said no countries met the standards set by Congress for the “manipulator” label. The move greases the wheels for the scheduled signing of a U.S.-China trade deal on Wednesday.
“The Treasury Department has helped secure a significant Phase One agreement with China that will lead to greater economic growth and opportunity for American workers and businesses,” said Treasury Secretary Steven Mnuchin. “China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability.”
What it means
The move reversed the department’s decision in August to add China to the list. President Donald Trump is scheduled to sign a partial trade deal with China in a White House ceremony that is expected to disclose the details of Chinese promises on currency and other trade matters.
Scott Kennedy, a specialist on the Chinese economy at the Center for Strategic and International Studies, said putting China on the list last year had been a “political step” designed to pressure Beijing in the middle of trade talks.
“China has not been manipulating its currency so this is just recognizing reality,” said David Dollar of the Brookings Institution, a former Beijing-based Treasury official.
Still, the administration shift was denounced by some lawmakers. “China is a currency manipulator—that is a fact,” insisted Senate Minority Leader Chuck Schumer, D-N.Y. “Unfortunately, President Trump would rather cave to President Xi [ Jinping] than stay tough on China.”
The Treasury report criticized Beijing for turning away from economic liberalization to a more state-directed approach and “increasing reliance on non-market mechanisms.”