White House: China will not be called currency manipulator

The Trump administration has chosen not to brand China a currency manipulator in an official report, reversing one of the president’s most prominent campaign promises on trade.

In a semiannual report on America’s major trading partners published late Friday, the Treasury Department declined to label any country a currency manipulator, though it kept China, Japan, Korea, Taiwan, Germany and Switzerland on a “watchlist” of countries that merit close attention for their currency practices.

During the campaign, Trump often claimed that China was manipulating the value of its currency to boost its exports, a policy that cost the United States manufacturing jobs. He promised to label the country a currency manipulator on the first day of his presidency.

But 83 days into his presidency, the president struck a different chord.

“They’re not currency manipulators,” Trump told The Wall Street Journal in an Apr. 12 interview, adding that China hasn’t been manipulating its currency for months and that labeling China a manipulator could discourage the country from helping the United States with North Korea.

Economists agree that China doesn’t currently merit the label of currency manipulator, and has not engaged in the practice for several years.

The value of a currency is determined by supply and demand, and currency manipulation occurs when a country buys or sell large amounts of its own currency on global markets in order to change the price.