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US to reverse China ‘currency manipulator’ label

A Chinese bank employee counts 100-yuan notes and US dollar bills at a bank counter in Nantong in China's eastern Jiangsu province on August 28, 2019.Image copyright
STR/Getty

The US will reverse its decision to brand China a currency manipulator as the countries work toward a trade deal.

The US Treasury Department is expected to announce the decision on Monday.

Washington and Beijing will this week sign “phase one” of a trade deal aimed reducing friction between the world’s two largest economies.

The US and China have been involved in a tit-for-tat trade war since 2018, with both imposing tariffs of billions of dollars of each other’s goods.

The reversal of the “currency manipulator” label help will ease tensions between Beijing and Washington.

President Donald Trump has repeatedly accused China of allowing the value of the yuan to fall, making Chinese goods cheaper.

The US listed China as a currency manipulator in August when it pledged to impose tariffs on American goods.

The threat was a response to Mr Trump’s promise to put a 10% tariff on $300bn (£246.7bn) of Chinese imports.

At the time, China blamed the weakening of its currency on the market, suggesting investors were concerned about the escalating trade war between the two countries.

Trade tensions

Under the US definition, currency manipulation is the deliberate effort by a country to influence the exchange rates between its currency and the US dollar to gain an “unfair competitive advantage in international trade”.

Mr Trump, who blames China for a decline in US manufacturing, promised to label China a manipulator during his 2016 election campaign.

But after he took office, he appeared to soften his tone. The US Treasury did not apply the designation in the regular reports it publishes about currency movements.

But eventually, the move was made in a statement by Treasury Secretary Steven Mnuchin amid heightened trade tensions between Beijing and Washington last summer. It was the first time the US had officially branded a country a currency manipulator since 1994.

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By Laura Price

Laura is the senior writer and Smartphones section editor responsible for managing software updates and smartphones section. She is very passionate about Gadgets & Technology and always looking around to use them in an innovative way in daily life. She reviews Gadgets & Applications to tell users about their optimum use to get the most out of in which they’ve put their time and hard earned money.
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