Trump admin. declines to brand China a currency manipulator

Tomas Mccoy
April 18, 2017

Trump has softened his rhetoric against China's trade practices as Beijing has intervened in foreign exchange markets to prop up the value of its yuan, and as he looks to China for help dealing with rising tension on the Korean peninsula.

China, Japan, South Korea and Taiwan remained on a list for special monitoring of currency practices, China by virtue of a massive trade surplus with the United States.

Unlike the previous administration, which issued its final report in October, the latest semi-annual report urges specific policy actions the countries should pursue that would lead to a lower trade surplus.

While Trump and Chinese President Xi Jinping last week agreed to 100-day trade talks, US business leaders in China have expressed concern about a lack of progress in gaining further access to the Chinese market despite years of negotiations.

Hours after North Korea paraded its weaponry and attempted a missile launch, President Trump's national security adviser said the USA leader will not allow Kim Jong Un's regime to have the capacity to threaten the U.S.

Instead, the administration's first twice-yearly currency review singled out China and five other countries as needing to be monitored for their currency practices.

Germany, as part of the eurozone, can not act unilaterally to change the value of the euro.

If North Korea were to fire a missile at the USA, "we would have to rely on our ability to intercept it, and by the way, I'm told that we do have that ability", McCain told NBC's "Meet the Press".

Over the last decade, China's effective exchange rate has appreciated more than any other major currency, rising a total of more than 40 percent, said David Dollar, a senior fellow at the Brookings Institution.

Trump declared on Wednesday that he'll back away from a campaign promise to name China a currency manipulator, a move that would have created friction between the world's largest economies as they try to boost trade cooperation and address North Korea's nuclear threat.

But the president's tweet indicated an openness to US intervention if China doesn't deal with the nuclear threat posed by the isolated country.

"There are artillery on the border between North and South Korea that can reach Seoul, and we can't take them all out before [they launch an attack]", McCain said.

Former Presidents George W. Bush and Barack Obama took a more diplomatic approach by applying pressure on China, Taiwan and other countries to change their policies during bilateral negotiations and multilateral talks.

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