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U.S. NEWS Tuesday 14 January 2020

U.S. drops designation of China as currency manipulator

By MARTIN CRUTSINGER trade practices criticized released Dec. 13, the ad-
AP Economics Writer the administration's deci- ministration said the agree-
WASHINGTON (AP) — The sion Monday. ment would address '"unfair
Trump administration is "China is a currency ma- currency practices by re-
dropping its designation of nipulator — that is a fact," quiring high-standard com-
China as a currency ma- said Sen. Chuck Schumer mitments to refrain from
nipulator in advance of of New York, the Demo- competitive devaluations
the signing Wednesday of cratic leader in the Sen- and targeting of exchange
a Phase 1 U.S.-China trade ate. "When it comes to the rates."'
agreement. president's stance on Chi- The signing of the Phase 1
The preliminary pact that na, Americans are getting agreement caps a rocky
the two sides are set to sign a lot of show and very little two-years of trade conflict
this week includes a sec- results.'" between the two nations in
tion that's intended to pre- The Treasury Department is which punitive tariffs were
vent China from manipu- required to report to Con- imposed on billions of dol-
lating its currency to gain gress twice a year in April In this April 25, 2018, file photo, attendees visit the Ford booth lars of products from each
trade advantages. and October on whether during Auto China 2018 show held in Beijing, China. nation. The battle escalat-
The action announced any countries are manipu- Associated Press ed uncertainty and caused
Monday comes five lating their currencies to the currency problem that war with China. businesses to pull back on
months after the Trump ad- gain unfair trade advan- could ultimately lead to Trump is scheduled to sign their investments, slowing
ministration had branded tages against U.S. busi- the imposition of economic the Phase 1 agreement on global growth. It also roiled
China a currency manipu- nesses and workers. When sanctions such as higher Wednesday after which financial markets with fears
lator — the first time that a country manipulates its tariffs on Chinese goods administration officials said that the trade war could
any country had been so currency to keep it arti- — something the Trump the text of the deal will be become serious enough to
named since 1994 during ficially low, its goods be- administration was already made public. push the U.S. economy into
the Clinton administration. come comparatively less doing in its tit-for-tat trade In a fact sheet on the deal a recession.q
Even while removing Chi- expensive overseas — and
na from its currency black other countries' goods be-
list, the Treasury Depart- come relatively more ex-
ment does name China as pensive. The new report is
one of 10 countries it says technically three months
require placement on a late, apparently because
watch list that will mean the Trump administration
their currency practices had delayed its release
will be closely monitored. until it had achieved the
In addition to China, the currency Phase 1 commit-
countries on that list are ments from China.
Germany, Ireland, Italy, Ja- The initial decision to brand
pan, South Korea, Malay- China as a manipulator
sia, Singapore, Switzerland had come in a surprise an-
and Vietnam. nouncement in August, re-
Treasury Secretary Ste- versing a Treasury finding in
ven Mnuchin said the ad- May that no country was
ministration had dropped manipulating its currency.
China's designation as a The United States had not
currency manipulator be- put any country on the ma-
cause of commitments in nipulation blacklist since
the Phase 1 trade agree- the Clinton administration
ment that President Don- branded China a manipu-
ald Trump is to sign with lator 26 years ago. Trump
China on Wednesday at had long accused China
the White House. of manipulating its cur-
"China has made enforce- rency, even though most
able commitments to re- independent experts con-
frain from competitive de- cluded that Beijing had
valuation, while promot- stopped doing so years
ing transparency and ac- ago.
countability," Mnuchin said The designation was large-
in a statement accompa- ly symbolic. It obliged the
nying the currency report. United States to enter into
Some critics of China's negotiations to resolve