Is Donald Trump right to label China a currency manipulator
Alex Deane, a Conservative commentator, says YES.
Once again, President Trump “triggers” his opponents by doing what he said he would do. He promised on the campaign trail to designate China as a currency manipulator; indeed, he’s late on this as he undertook to do so on “day one” of his presidency.
I loathe trade wars; tariffs are bad and retaliation spirals into punishment for consumers in an environment in which everyone loses. But that doesn’t change the fact that China let the renminbi weaken to under ¥7 to the dollar on Monday. China has a G20 commitment to refrain from competitive devaluation. This behaviour violates that commitment.
The People’s Bank of China acknowledged that it has ample control over the renminbi exchange rate, pledging to “continue to innovate and enrich the control toolbox, and take necessary and targeted measures against… behaviour that may occur in the foreign exchange market”.
The Chinese openly acknowledge that they manipulate their currency. When someone says Wednesday follows Tuesday, they’re right, no matter how much you don’t like them.
Morgan Schondelmeier, head of development at the Adam Smith Institute, says NO.
Sino-American relations have been at the centre of Donald Trump’s global agenda since before he was elected. Positioning himself as a strongman against Beijing by labelling China a currency manipulator is just the latest instalment in a poorly thought-out and economically damaging trade war.
There may be some truth to the charge that Beijing manipulates the renminbi, or at least has done so in the past, but this escalation is not helpful.
Trump is using allegations of Chinese currency manipulation to drive up domestic support for his tariff agenda, attempting to convince Americans that the Chinese are the ones really footing the bill for his tariffs. In reality, this is just the first step towards the US imposing further sanctions on China, which will continue to negatively impact American consumers.
Trump seems to have underestimated how far China is willing to go in retaliation, and while this accusation of currency manipulation is a largely symbolic gesture, it further erodes trust between the two parties as they ostensibly attempt to reach a deal.
Main image credit: Getty