U.S. to Lift Yuan Manipulator Tag Ahead of China Trade Deal
· Designation, first made in August, has complicated trade talks
· Treasury report expected before trade deal signed on Jan. 15
By Saleha Mohsin and Jenny Leonard, Bloomberg
January 13, 2020
President Donald Trump’s administration plans to lift its designation of China as a currency manipulator, people familiar with the matter said, removing an obstacle to a trade deal the two nations are set to sign this week.
The Treasury Department will make the move in a semi-annual report, expected to be released soon, after being delayed as the U.S. and China finalize a “phase one” trade pact, said the people, who spoke on condition of anonymity.
Treasury Secretary Steven Mnuchin in August first formally labeled China a currency-manipulator, a move that further escalated the trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation to new U.S. tariffs.
A Treasury Department spokeswoman declined to comment. A reporter for Fox Business Network earlier tweeted the news about Treasury’s plans.
Now that a deal is in sight, the designation is being lifted. The administration had at one point considered maintaining the label and instead announcing it would monitor the yuan with the possibility of lifting the designation in August of this year, according to the people.
The offshore Chinese yuan strengthened to 6.883 per dollar on Monday.
Mnuchin’s August 2019 announcement prompted authorities in Beijing to increase transparency around how they manage the yuan. Some of that data has provided support for the Treasury’s view that the People’s Bank of China engages in competitive devaluations of its currency, the people said.
But economists have criticized the U.S. decision to call China a manipulator. The International Monetary Fund said...