US officially designates China a ‘currency manipulator’ as trade war rages
The United States has formally accused China of manipulating its currency, marking the second major escalation in the two countries’ spiralling trade war in just 24 hours.
Washington’s sudden move came the day China allowed the yuan to fall below seven to the dollar for the first time in about a decade – provoking US President Donald Trump’s ire and sending global equities markets diving into the red.
Wall Street yesterday posted its worst one-day losses of 2019 as hope of any near-term resolution to the year-long trade war between the world’s top two economies appeared to slide out of view.
In a Twitter outburst earlier in the day, Mr Trump had angrily accused Beijing of weakening the yuan “to steal our businesses and factories”.
Chinese state media also announced yesterday that Beijing had suspended purchases of American farm exports, piling pain on US agricultural states already battered by Beijing’s retaliation in the trade war.
US Treasury Secretary Steven Mnuchin, “under the auspices of President Trump, has today determined that China is a currency manipulator,” the Treasury Department said in a statement.
As a result, Mr Mnuchin will engage the International Monetary Fund “to eliminate the unfair competitive advantage created by China’s latest actions,” the statement said.
Behind the US and China’s conscious economic decoupling
The new designation is largely symbolic, since it calls for consultations with countries found to be manipulating their currencies.
But it could gain teeth if the Commerce Department begins imposing tariffs on countries found to be undervaluing their currencies, as that department said earlier this year it plans to do.
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