Trump backs away from labeling China as currency manipulator

Trump backs away from labeling China as currency manipulator. April. 14, 2017 07:27. by Hyong-gwon Pu, Wan-Jun Yun bookum90@donga.com,zeitung@donga.com.

U.S. President Donald Trump announced that his administration will not label China as a currency manipulator in a bid to earn China’s cooperation to deter North Korea’s nuclear and missile programs. The latest remark by the U.S. president seems to be a “carrot” to coax China into pressuring Pyongyang, following the “stick” that the Trump administration wielded by dispatching the nuclear-powered Carl Vinson aircraft carrier to the Korean peninsula, threatening to intercept North Korean missiles.

“They’re not currency manipulators,” said President Trump in an interview with the Wall Street Journal on Wednesday, adding that China had not manipulated the yuan for months and that the Treasury Department would not label China as a currency manipulator in its report to Congress to be issued this week. He explained that “taking the step (of labeling China as currency manipulators) now could jeopardize the talks with Beijing on confronting the threat from North Korea.”

It appears that this sudden about-face of the Trump administration’s stance on China is to reciprocate the vow that Chinese President Xi Jinping took on a phone call with President Trump on the same day to further his effort to pressure North Korea. “During our conversation on Wednesday, President Xi Jinping said China refused to allow North Korean coal cargo ships to unload in China,” said Trump.

President Trump publicly acknowledged that during the Florida summit on April 6 and 7, he proposed a grand bargain to President Xi to offer a better trade deal for China in exchange of greater Chinese support in pressuring North Korea. Trump said that he told President Xi during their summit: “The U.S. is suffering enormous trade deficits against China. But you want to make a great deal? Solve the problem in North Korea. That’s worth deficits.” He added that he wants to clinch a “great deal” with China.