The United States removed the label “Currency Menu Polluter” on China
- January 15, 2020
- Andrew S Gillis
The United States has withdrawn its decision to declare China a currency manipulator. The move comes at a time of readiness to ease tensions in the trade war between the two countries.
The United States has said that it has taken this decision because China has agreed that it will not reduce the value of its currency. Reducing the value of the currency makes Chinese products cheaper for foreign buyers.
This week, the US and China are about to sign a first-level agreement.
The agreement will prevent a series of sanctions against each other, which has been ongoing since the trade war between the two countries since 2018.
US Secretary of State Steven Mnuchin has said that “China has made viable promises that it will not reduce the value of its currency for competition and at the same time introduce transparency and accountability in its trade.”
President Donald Trump has long accused China of reducing the value of the yuan to sell its products cheaper in the global market.
However, on Monday, the United States said that during the boom of this trade war, the value of Chinese currency yuan increased from last August.
Mr Mnuchin discussed China’s Currency
Mr. Mnuchin has said that China has made “viable promises” about not reducing the value of the currency and has promised to provide more information about the value of the exchange.
The US Treasury has said that “in this regard, the US Treasury has decided that China should not be called a currency manipulating country at present.”
Stress in Business Relationships
The United States officially added China to the currency appreciation list last August, when tensions between the US and China escalated.
China has threatened to impose a 10 per cent import duty on products imported from the United States in response to US President Trump’s actions, worth $ 300 billion.
At the time, China had reported the falling price of the yuan in the open market because of the low value of its currency, because investors were worried about the growing trade war between the two countries.
China’s stance was also endorsed by the International Monetary Fund (IMF), in which the value of China’s currency was accurate.
According to US laws, manipulation of the value of the currency means that someone intentionally tries to influence the value of the currency and its exchange with the US dollar so that its products have an unfair advantage in exporting. reached.
President Trump, who blames China for reducing America’s manufacturing industry, promised during his election campaign in 2016 that he would declare China a currency-manipulating country.
But when he came to power, he had dimmed his tone slightly. In its annual report, the US Treasury did not say that China was a country for money change.
US Secretary of State Steven Mnuchin later took action against China under pressure from President Trump. For the first time since 1994, the United States has labelled for the first time any country to curb currency appreciation.