the united States has left this Monday to consider officially to China as a currency manipulator, as reported by the Treasury Department in a report. The decision clears an obstacle to achieving an agreement to stop the trade war that the two powers have been held for nearly two years waging. The announcement comes on a day in which the negotiators chinese have come to Washington, where on Wednesday is scheduled to sign the first phase of such a trade agreement, closed in December between the two negotiating teams.
The measure repeals the controversial decision, taken in August last year by the Administration to Trump, in the midst of an escalation of trade tensions between the two powers, to include China in the list of american countries that manipulate their currency to gain a competitive advantage. That summer, the president Trump accused Beijing of undervaluing the yuan to mitigate the impact of the tariffs it had imposed on chinese imports.
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In a long-awaited report, released Monday afternoon, the Treasury gave its first public review of the currency practices of Beijing, and explains os commitments made by China to improve transparency in its handling of the yuan. The commitment, on the part of both countries, to prevent currency devaluations that favour their exports form part of the agreement that Trump and chinese leaders plan to sign on Wednesday.
“China has acquired commitments executable refrain from competitive devaluation, to promote transparency and accountability,” said the secretary of the treasury, Steven Mnuchin said in a statement.
For a good part of the commercial conflict between the two countries, which started when Trump announced the imposition of tariffs on chinese products, in march 2018, the yuan has been depreciating against the dollar, reducing the impact of the levies and causing frustration in the us Administration. The official designation of China as a currency manipulator was a measure of high symbolic value, which had not happened since 1994. Mnuchin had been reluctant initially, because China did not meet all the requirements required by your Department to join the list. But in the end, the 6 of August of last year, less than a week after announcing that the tariff would cover all goods imported from the asian giant, Mnuchin yielded to the pressures of Trump and took the decision by appealing to a law of 1988 which provided a definition that was more permissive of currency manipulation.
The measure was criticized by many economists, and the International Monetary Fund said in September that there was no evidence of manipulation. The weakening of the yuan could be attributed, to warn, to a slowdown in the growth of the economy of the country. The decision of August, in addition, was announced in a press release, and not within the more detailed report of the Treasury, depriving analysts of a detailed explanation of the decision.
