US drops China’s designation as currency manipulator

epa08069298 A news conference in Beijing, China about the trade negotiations between the United States and China is seen on a screen as traders work on the floor of the New York Stock Exchange at the Opening Bell in New York, New York, USA, 13 December 2019. Global investors are watching and reacting to news of certain agreements in the ongoing trade dispute between China and the United States, as well as the economic responses to election in results in the United Kingdom. EPA-EFE/JUSTIN LANE

Reading Time: < 1 minute

The U.S. Treasury Department on Monday dropped its designation of China as a currency manipulator days before top officials of the world’s two largest economies were due to sign a preliminary trade agreement to ease an 18-month-old tariff war.

The US said it made the change because China had agreed to refrain from devaluing its currency to make its own goods cheaper for foreign buyers. Washington and Beijing are expected to sign that “phase one” pact this week, according to BBC. 

The deal is aimed at de-escalating the tit-for-tat tariff war the two countries have engaged in since 2018. “China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability,” US Treasury Secretary, Steven Mnuchin, said.

France 24 its latest currency report, the Treasury said that as part of the Phase 1 trade deal, China had made “enforceable commitments to refrain from competitive devaluation” and agreed to publish relevant data on exchange rates and external balances.

Chinese Vice Premier Liu He arrived in Washington on Monday for a White House ceremony to sign the trade deal with Trump. People familiar with the negotiations said that although the manipulator designation had no real consequences for Beijing, its removal was an important symbol of goodwill for Chinese officials. 

Via BBC / France 24

%d bloggers like this: