Trump defends about-face on labeling China a currency manipulator

Korean won Chinese yuan and Japanese yen notes seen on U.S. 100 dollar notes

"China has a long track record of engaging in persistent, large-scale, one-way foreign exchange intervention", the Treasury Department said in its semiannual report on the foreign-exchange policies of major USA trade partners.

In the first foreign-currency report released by the Treasury Department on Friday, the Donald Trump administration had acknowledged that no major trading partner was manipulating currency for an unfair trade advantage. However, the U.S. Treasury report noted that it will "scrutinize" China's trade and currency intervention practices.

"They're not currency manipulators", Trump told the The Wall Street Journal in an interview.

The U.S. Treasury releases the Report on Foreign Exchange Policies of Major Trading Partners of the United States in a bid to implement the new provisions of the Trade Facilitation and Trade Enforcement Act of 2015, also known as the Customs Bill.

During the campaign, Trump had often claimed that China was manipulating its currency to boost exports, costing the United States manufacturing jobs.

The president was criticized last week when he broke from allegations made in stump speeches during the campaign that Beijing purposely devalued its currency to harm the U.S. on trade. "He weighs risks. This is demonstrated by his refusal to strike North Korea, and inclusion of China in diplomatic talks rather than conflict with it", Sen.

"Had a very good call last night with the President of China concerning the menace of North Korea", Trump wrote on April 12 about the call.

China was the last nation to be named a currency manipulator by the US.

"I think China has really been working very hard" on North Korea, he said.

It has placed China, Germany, Japan, Korea, Switzerland and Taiwan in the monitoring list in its six-monthly report to the Congress.

China does not fully meet the department's definition of a currency manipulator because it has recently been buying yuan to prevent a sudden drop in the Chinese currency, instead of steering it lower.

Pence was beginning a 10-day trip to Asia in what his aides said was a sign of USA commitment to its ally in the face of rising tension.

After the meeting, he said the meeting had been one of "tremendous goodwill and friendship", and the two leaders had discussed a 100-day plan to boost USA exports to China.

"The U.S. hasn't gotten anything from China yet", said Evan Medeiros, who was Obama's top Asia adviser in the White House.

The report urged Germany to take policy steps - particularly greater use of fiscal policy - to encourage stronger domestic demand growth, which would place upward pressure on the euro's nominal and real effective exchange rates and help reduce its large external imbalances. Chinese leaders have sought a US relationship based on the two powers respecting each other's spheres of influence and not intervening in one another's internal affairs.

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