US Treasury Secretary Steven Mnuchin issued a statement on August 5, announcing that China will be recognized as a currency manipulator. Washington will work with the International Monetary Fund (IMF) to eliminate unfair competition in Beijing. This is the United States has made relevant decisions again since 1994.

The U.S. Treasury Department said that the People’s Bank of China’s statement on the 5th proved that the Beijing government fully controlled the RMB exchange rate. At that time, the PBOC expressed its experience and ability to maintain the smooth operation of the foreign exchange market and maintain the renminbi at a reasonable and balanced level.

Washington believes that China’s actions violate the G20’s commitment to avoid currency competitive devaluation. The Ministry of Finance expects Beijing to abide by these commitments and will not use the RMB exchange rate for competition.

US law confirms that the major trading partners have three major criteria for handling problems, including a surplus in the global current account, a large bilateral trade surplus with the United States, and continued unilateral effects on the foreign exchange market. Once Washington has determined that the country concerned is a currency manipulator, the Ministry of Finance will hold negotiations with relevant countries to discuss amendments, otherwise the country may face sanctions.

The United States accused South Korea and Taiwan of manipulating the exchange rate in 1988, and China faced the same allegations in 1994. This time, the Donald Trump government decided that the US-China trade issue is in a stalemate, and this will lead to an escalation of the trade war.

The United States wants to list other countries as currency manipulators. It needs to meet three specific conditions . First, the trade surplus with the United States reaches more than 20 billion U.S. dollars per year. Second, the current account surplus of the economy accounts for more than 3 of the total domestic production (GDP). Third, the exchange rate trading does not respect the market mechanism. For example, continuous one-way purchase of foreign assets causes the domestic currency to depreciate, and the ratio of total annual purchases to GDP is more than 2%.

Trump: China gets a lot of money from the US

Shortly before Mnuchin announced the decision, President Trump sent four consecutive posts on Twitter, criticizing China’s attempt to obtain hundreds of billions of dollars from the United States by manipulating exchange rates and unfair trade practices. Money, the situation should have stopped many years ago.

The yuan fell below 7 against the dollar, closing at a new low of 11 years. Trump said that China has reduced the exchange rate to a near-historical low, describing that currency manipulation is a major violation. “From this point of view, everyone should now understand that tariffs are not borne by Americans but more than China. The United States is making tens of billions of dollars in revenue.”

Trump said that China has been stealing American companies and factories by manipulating the exchange rate, damaging US jobs, depressing American workers’ wages, and hurting American farmers’ incomes.

Sign Up for Our Newsletters

Get notified of important news and special executive deals.

You May Also Like

US 2020 early election debate lineup announced the Democratic Party’s three generations of competition

The 20 Democratic presidential candidates will hold their first television debate on…

Abe’s sweet talk? Said to have eaten a lot of salt with Putin’s friends.

Japanese Prime Minister Shinzo Abe attended the Eastern Economic Forum in Vladivostok,…

The agreement has the opportunity to extend to December to sign a special meeting or European meeting

Reuters quoted a senior US official on November 6th, and the meeting…

Extending Huawei’s exemption and postponing additional tariffs Trump’s show to China is only a cover-up

US Commerce Secretary Wilbur Ross announced on August 19 that the department…

North Korea: China’s springboard for breaking Northeast Asia

North Korea launched two short-range ballistic missiles on Wednesday morning (July 31)…

“Hong Kong Bill of Rights and Democracy” passes China-US relations

After more than a month of internal consultations, the US Senate finally…

No one in the Israeli elections, the Blue and White Party refused to join the Netanyahu government.

Israel held a general election on September 17, but Prime Minister Netanyahu…

Trump’s impeachment plunges into Rab war on first day of change in Washington bipartisan politics

On Tuesday (January 21) at 1 pm U.S. Eastern Time, the impeachment…