Donald Trump tells the Wall Street Journal that he no longer plans to label China a currency manipulator―another of the actions that during the campaign he vowed to do on his first day in office. Trump says he doesn't need to because Beijing has allowed its currency to rise since his election. The only problem is that the numbers belie Trump's claims.
Data: Money.net; Chart: Andrew Witherspoon / Axios
What Trump gets wrong:
- China's currency had been flat relative the the dollar since Inauguration Day;
- Most economists believe that the renminbi hasn't been undervalued since roughly 2011;
- And even though the renminbi has been weakening relative to the dollar since China's 2014 economic downturn, that is more a feature of the dollar itself, not any renminbi weakness. When comparing the renminbi to a basket of other currencies, the Chinese currency's weakening is much less severe.