[ad_1]
WASHINGTON – The Trump administration is enthusiastically engaged in a trade war with China, but decided Wednesday not to qualify the nation as a currency manipulator despite repeated complaints by President Trump that Beijing would weaken the renminbi.
The Treasury Department's biannual report, the fourth in the Trump presidency, criticized China's trade and monetary practices but still failed to conclude that the Chinese government was unduly devaluing the renminbi. This would have greatly increased the tension between the United States and China. however, its status has remained unchanged, mainly for technical reasons.
The Treasury Department said China's direct intervention to reduce the value of its currency had been "limited," but said Beijing's practices merited scrutiny.
"The lack of transparency of the Chinese currency and the recent weakness of the Chinese currency are particularly worrying," said Steven Mnuchin, Treasury Secretary, in a statement. "These are a major challenge to a fairer and more balanced trade, and we will continue to monitor and review China's foreign exchange practices, including ongoing discussions with the People's Bank of China." . "
With China, the Treasury Department said that Germany, India, Japan, Korea and Switzerland would remain on its "watch list" for potential manipulations.
The renminbi fell 6% against the dollar this year, It is disturbing that the Chinese government is intervening to make its exports cheaper in the face of Mr Trump's rights over Chinese goods worth $ 250 billion. On Friday, Mnuchin warned China not to weaken its currency and suggested that any trade deal between the two countries contain measures to prevent manipulation of the renminbi.
The Treasury Department determines whether a country should be described as a currency manipulator on the basis of bilateral trade deficits and signs that a country depresses its currency. The United States has not officially designated a tamper in another country since it attributed the label to China in 1994. This is supposed to move the negotiations forward to solve the problem.
The report was released as the United States and China were stuck in trade talks that had been stalled for months and did not bode well for an imminent move.
Before a White House cabinet meeting on Wednesday, Trump said China was not ready to reach an agreement.
"It's hard for them," he said. "They have been so good for so long."
Trump has threatened to impose more tariffs on China if it does not make concessions soon, including giving up a plan to dominate the industries of the future through an initiative called "Made in China 2025" and by urging US companies to yield valuable technology to do business there. The president warned that he could impose taxes on the $ 500 billion worth of goods imported by the United States.
Administration officials have been following the movements of the Chinese currency this year and have expressed growing concern as their value against the dollar has fallen by about 6% since January. A weaker renminbi mitigates the impact of Trump's tariffs by making Chinese exports cheaper.
The Treasury report notes that, until June of this year, China had a $ 390 billion trade surplus with the United States, making it the largest such deficit among all major partners commercial.
Mr Trump has repeatedly accused other countries of having manipulated currencies, notably during an interview given to Reuters in August.
"I think China manipulates its currency, absolutely," said Trump. "And I think the euro is also handled."
As a presidential candidate, Mr. Trump called China "the greatest currency manipulator of all time" and promised to move to action if elected.
Last week, Mnuchin said he discussed the recent weakness of the renminbi with Yi Gan, governor of the People's Bank of China, at the annual meetings of the World Bank and the International Monetary Fund in Indonesia.
"I have expressed my concerns about the weakness of the currency and we have also discussed the way forward for more balanced trade relations," said Mnuchin.
Mr. Trump and Chinese President Xi Jinping are expected to meet in Argentina next month at the summit meeting of the Group of 20. The prospect of a face-to-face meeting between the two leaders has spawned the momentum of the world. hope for a breakthrough in the trade dispute.
But some members of Mr. Trump's economic team temper their optimism.
Larry Kudlow, director of the National Economic Council, said on Wednesday that the Chinese government was reluctant to negotiate on issues such as intellectual property theft and the forced transfer of technology from US companies seeking to do business in China.
"China is a problem," said Kudlow on the Fox Business Network. "They did not respond to our requests."
