Jan 13, 2020

Treasury Department drops China's currency manipulator designation

Trump and Chinese President Xi Jingping. Photo: BRENDAN SMIALOWSKI/AFP via Getty Images.

The Treasury Department announced Monday that China will no longer be designated as a currency manipulator, just two days before President Trump and Vice Premier Liu He are set to sign "phase one" of a long-awaited trade deal, CNBC reports.

Why it matters, per Axios' Felix Salmon: China never fit the textbook definition of being a currency manipulator. The decision to apply the label was a political one — as was the decision to remove it.

The big picture: China was added to the list just five months ago after its government allowed the yuan to slip below a 7-to-1 dollar ratio for the first time in over a decade. The move was largely symbolic, but helped ratchet up trade tensions between the two countries.

  • China will now be moved to the "monitoring list," joining nine other countries including Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland and Vietnam.
  • Treasury Secretary Steven Mnuchin said in a statement: "China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability."

Go deeper: The stakes of a swift U.S.-China decoupling

Go deeper

Why China is no longer a currency manipulator

Data: Investing.com; Chart: Danielle Alberti/Axios

China will no longer be labeled a currency manipulator, the Treasury Department announced, just two days before President Trump and Vice Premier Liu He are set to sign "phase one" of a long-awaited trade deal.

What happened: China was added to the list just five months ago after its government allowed the yuan to slip below a 7-to-1 dollar ratio for the first time in more than a decade.

Go deeperArrowJan 14, 2020

China to cut tariffs on $75 billion of U.S. goods

Chinese Vice Premier Liu He and President Trump at the White House on Jan. 15. Photo: Mark Wilson/Getty Images

China will halve tariffs on about $75 billion of imports from the U.S., effective Feb. 14, the country's finance ministry said in statements posted to its website Thursday.

Why it matters: This is another sign of tensions easing in the prolonged trade war between the U.S. and China that's brought major uncertainty to the markets and hurt the U.S. manufacturing industry and farmers.

The "phase one" deal isn't all that it seems

Vice Premier Liu He and President Trump after signing phase one Wednesday. Photo: Mark Wilson/Getty Images

There was limited fanfare from the stock market after President Trump and Chinese Vice Premier Liu He signed the "phase one" trade deal yesterday.

What happened: The 94-page document will roll back some U.S. tariffs on Chinese goods and see China increase purchases of U.S. goods and services by $200 billion over two years, but it leaves more questions than answers, experts say.

Go deeperArrowJan 16, 2020