On Monday, President Trump made clear to the world that the United States would no longer be tolerating currency manipulation from China and Russia. It has been alleged for years that the international trade giants have subjugated other countries to unfair trade practices by devaluing their currencies.
President Trump has recently taken a stand against China for unfair trade practices and a tremendous trade deficit. He has called Chinese President Xi Jinping to explore methods of conducting more balanced trade practices with the U.S.
“Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates,” Trump tweeted.
“Not acceptable!” he added.
Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!
— Donald J. Trump (@realDonaldTrump) April 16, 2018
Here’s more, per Politico:
Trump’s sweeping claim came after the U.S. avoided designating any of its major trading partners as currency manipulators in the Treasury Department’s semi-annual currency report, though it did denounce “the increasingly non-market direction of China’s economic development.”
But going back to his days on the campaign trail, Trump has repeatedly rebuked the Asian power for employing currency manipulation techniques and other inequitable means to gain an upper hand in global trade negotiations.
The president has rarely accused Russia, however, of similar economic scheming. Russia is also absent from an Obama-era list of nations the Treasury Department monitors for extra scrutiny, including China, Japan, Germany, India, South Korea and Switzerland.
— Advertisement —
China and the United States conducted rigorous back-and-forth trade one-upmanship over the past several weeks with each raising tariffs on certain imports:
The White House earlier this month announced plans to raise tariffs 25 percent on Chinese manufacturing imports and other products valued at about $50 billion, citing decades of allegedly unfair trade practices.
The retaliatory tariffs China’s Commerce Ministry announced a day later included duties on the $14 billion of soybeans China imports from the U.S. each year. China remains the second-largest market for American agricultural exports.
Trump then intensified the conflict further when he asked the U.S. trade representative to consider additional tariffs on $100 billion in Chinese goods.
The Trump administration has yet to announce a plan to deal with the currency manipulation tactics, but both Trump and Treasury Secretary Steven Mnuchin previously voiced the option of lowering the value of the U.S. dollar:
In January, Treasury Secretary Steve Mnuchin elicited criticism from economists and Wall Street when he advocated for a weaker U.S. dollar in hopes that it would bolster America’s trade advantages.
“Obviously, a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters at the World Economic Forum in Davos, Switzerland. He added that recent declines in the value of the dollar against other currencies were “not a concern of ours at all.”
Trump has previously judged the dollar as “too strong,” making it more difficult for American companies to compete in the global marketplace. That assessment broke with decades of White House and Treasury Department policy of publicly supporting a strong dollar. Trump’s new National Economic Council director, Larry Kudlow, is a noted proponent of the strong dollar policy.