China on Tuesday strongly rejected the Trump administration’s determination that it’s manipulating its currency for an unfair trade advantage and accused the United States of protectionist behavior that is hurting the global economy.
“The United States disregards the facts and unreasonably affixes China with the label of ‘currency manipulator,’ which is a behavior that harms others and harms oneself,” the People’s Bank of China said, according to a translation of a statement posted on its website. “The Chinese side firmly opposes this. This will not only seriously undermine the international financial order, but also trigger financial market turmoil.”
The Central Bank also accused the United States of “wayward unilateralism and protectionist behavior that seriously undermines international rules and will have a major impact on global economic finance.”
Late Monday, Treasury Secretary Steven Mnuchin took the rare step of formally declaring China a currency manipulator — a designation that no U.S. administration has made in regard to any country since 1994, when China was designated for the first and only other time.
Mnuchin’s announcement came hours after President Donald Trump lashed out at Beijing for allowing its currency, officially known as the renminbi, to depreciate above 7 yuan-to-the-dollar for the first time in over a decade.
A weaker yuan relative to the dollar makes it cheaper for Chinese companies to sell in the U.S., offsetting some of the impact of tariffs imposed by Trump. It also makes the price of American goods more expensive for Chinese importers.
Trump on Tuesday gave a clear signal that he was willing to dig in for a protracted trade war by indicating that he would continue a program to financially assist U.S. farmers hurt by China’s retaliation. The administration has already set aside roughly $28 billion in payments to agricultural producers that have been shut out of one of their most valuable markets this year and last year.
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China strongly rejected the Trump administration's determination that it's manipulating its currency and accused the U.S. Treasury Department of ignoring reality https://t.co/hAcr5envDC
— POLITICO (@politico) August 6, 2019
GOP economist @djheakin on Trump’s “currency manipulator” escalation:
“designed provocation. Nothing is irreversible, but trade war is now a currency war. threatens all-out economic war. takes a long time to unwind bad policy – 50 years to unwind Depression-era protectionism”
— John Harwood (@JohnJHarwood) August 5, 2019
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