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US officially declines to label China as currency manipulator

Press Trust of India  |  Washington 

The Trump administration has officially declined to brand a currency manipulator, in another major U-turn for the US president, who had repeatedly pledged during his campaign to do so soon after taking office. The reversal by the Treasury department was one of the aslmost half-a-dozen instances when Donald Trump or his administration have gone back on his poll campaign promises. On the campaign trail, Trump had called "obsolete." But this week he said was no longer obsolete.

His stance on and Syrian President Bashar-al Assad has also done a 180. Yesterday, the Treasury department in its six-monthly report to the placed China, Germany, Japan, Korea, and in the "monitoring list" of countries that needed close attention for their currency practices. The move was expected as Trump earlier this week had said ] was not a currency manipulator. The department, however, said that both and should do more to reduce their large trade surpluses with the US. In a statement, the Treasury department said the findings and recommendations of the report are intended to combat "potentially unfair currency practices" and support the growth of free and fair trade. "The US cannot and will not bear the burden of an international trading system that unfairly disadvantages our exports and unfairly advantages the exports of our trading partners through artificially distorted exchange rates," it said. "Expanding trade in a way that is freer and fairer for all Americans requires that other economies avoid unfair currency practices, and we will continue to monitor this carefully," said Treasury Secretary Steven Mnuchin. The opposition Democratic Party leaders slammed Trump administration for going back on its poll promise. "Unfortunately the president's failure to name a currency manipulator is symptomatic of a lack of real, tough action on trade against steals our intellectual property, doesn't let American companies compete in China, and has manipulated their currency causing the loss of millions of jobs," said Senate Minority Leader Charles E Schumer. He said may not be manipulating their currency "at the moment because it doesn't suit their economic needs" but "make no mistake about it, as soon as the tide turns they will," he said, adding that the Trump has given them a "green light to steal our jobs". Schumer also said that the best way to get to cooperate on North Korea was to be tough on them with trade, which is first thing the Chinese government "cares about." During the campaign, Trump had often claimed that was manipulating its currency to boost exports, costing the United States manufacturing jobs. He had promised to label the country a currency manipulator on 'Day One' of his presidency. But the reversal could also mean that Trump and Chinese President Xi Jinping may have figured a way to fix the trade imbalance and the tension in the Korean peninsula during their meeting earlier this month in Florida. The two leaders also had a telephonic call on Wednesday, when they discussed the situations in North Korea and Syria. The Treasury department, however, alleged that has a long track record of engaging in persistent, large-scale, one-way foreign exchange intervention, doing so for roughly a decade to resist renminbi (RMB) appreciation even as its trade and current account surpluses soared. "continues to pursue a wide array of policies that limit market access for imported goods and services, and maintains a restrictive investment regime which adversely affects foreign investors," it said. It said it will scrutinise China's trade and currency practices very closely, especially in light of the extremely sizable bilateral trade surplus that has with the US. "will need to demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the RMB rise with market forces once appreciation pressures resume," it said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, April 15 2017. 10:32 IST