US TREASURY: Mnuchin brands China a “Currency Manipulator”
The US has officially branded China a “currency manipulator”, a statement which will flame current tensions between the world’s two largest super economies.
The statement by the US Treasury in a press release yesterday, follows sharp falls in the overall value of the Chinese yuan against the dollar.
On Monday [5 August 2019] the yuan passed the seven-per-dollar level for the first time since 2008, prompting US President @realDonaldTrump to post the following message on his infamous Twitter feed: “China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!
The latest drop even caught the markets off-guard as the norm is for Beijing to support the currency.
The US Treasury department defines currency manipulation as when countries deliberately influence the exchange rate between their currency and the US dollar to gain “unfair competitive advantage
in international trade”.
China pledged to retaliate after US President Donald Trump vowed to impose 10% tariffs on $300bn (£246.7bn) of Chinese imports. The People’s Bank of China (PBOC) covered their position by making a statement to effect that the slump in the yuan was driven by “unilateralism and trade protectionism measures and the imposition of tariff increases on China”.
