Donald Trump misrepresents facts on China's currency

WASHINGTON - In the latest chapter of an escalating trade conflict with China, US President Donald Trump is again accusing Beijing of manipulating its currency to gain trade advantages. In doing so, he's misrepresenting the facts.

Trump has been making a charge of currency manipulation since the 2016 US presidential campaign, even promising to take action against China right after taking office in 2017.

His administration took it to the next level on Monday, formally labeling China a currency manipulator after China allowed its currency yuan to fall below the seven yuan-to-$1 level for the first time in 11 years. It was also the first time the US Treasury Department put China on the currency blacklist since 1994. The designation could pave the way for more US sanctions against China.

Trump's latest complaint in tweets earlier on Monday came after the dramatic drop in the yuan.

Trump said on Twitter: "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!"

Trump also tweeted: "Historic currency manipulation by China."

But it is Trump's own Treasury Department which had failed to cite China as a currency manipulator in five reports it had issued since 2017. Treasury's move came in a news release as opposed to a regular currency report issued every six months.

A weaker yuan would make Chinese goods less expensive in the US, potentially offsetting some of the impact of the tariffs Trump has already imposed on $250 billion in Chinese goods and is threatening to widen to another $300 billion in goods next month. Those US tariffs drive up the cost of Chinese imports to US consumers.

Trump seems to blame the US Federal Reserve for not taking action against China in the currency area.

In reality, the Treasury's previous reports had repeatedly said that China did not meet the requirements established in US law to be branded a currency manipulator.

Trump's mention of the Federal Reserve could also be an effort to pressure the US central bank to lower its benchmark interest rate further. It cut the rate for the first time in more than a decade last week, and many analysts believe it will cut rates again in September to keep the fallout from a trade conflict from derailing the US economy.

Associated Press

(China Daily 08/07/2019 page12)