Ahead of all the pomp and circumstance expected at the trade agreement signing ceremony this week, the Treasury Department has removed the designation of China as a “currency manipulator.”
The Treasury Department released its long-delayed currency report on Monday afternoon, providing its first public analysis of China’s currency practices since it designated China a manipulator in August at the direction of Mr. Trump. The report noted that China — which Mr. Trump had accused of weakening its currency, the renminbi, to make its goods cheaper to sell overseas — had made important commitments regarding the renminbi as part of the new trade agreement and that its value had appreciated since September.“China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability,” Treasury Secretary Steven Mnuchin said in a statement.
The signing ceremony is scheduled for this Wednesday.
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.President Donald Trump has repeatedly accused China of allowing the value of the yuan to fall, making Chinese goods cheaper.But, on Monday, the US said that the value of the yuan had appreciated since August, at the height of the trade war.Mr Mnuchin also said that China had made “enforceable commitments” to refrain from devaluation and to share more information about its exchange rates.”In this context, Treasury has determined that China should no longer be designated as a currency manipulator at this time,” the Treasury said.
The trade deal includes an agreement with China to buy $200 billion of U.S. goods over two years in four industries.
The target for manufactured goods purchases will be the largest, worth around $75 billion. China will also promise to buy $50 billion worth of energy, $40 billion in agriculture and $35 billion to $40 billion in services, the three people said.Analysts have speculated for weeks about what kinds of purchases China could make in these sectors.“Energy products are specifically mentioned in the section on ‘Expanding Trade’ in the fact sheet produced by the USTR on Dec. 13, 2019,” said Moody’s Analytics chief Asia-Pacific economist Steve Cochrane. “So it seems like a good possibility to be included in the details of the phase one agreement to be signed on Wednesday.”
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