US holds off on labeling China a currency manipulator; warns Beijing on currency practices; keeps future action open

Time of India

13 hours ago

US- China flags
The
US treasury department
on Thursday stopped short of labeling China a currency manipulator, but criticised Beijing for its lack of transparency in exchange rate policies. The decision came in the treasury's semi-annual report to Congress on the foreign exchange and macroeconomic practices of major trading partners.
While the report did not officially accuse China of manipulating its currency, it noted that China stood out for not being open about how it manages the renminbi (RMB). A Treasury official told reporters that the US may still make a determination in the fall, depending on new evidence that could emerge.
During
Donald Trump
's first term, then-treasury secretary Steve Mnuchin had labeled China a currency manipulator in 2019, the first time the US had done so since 1994.
US treasury secretary Scott Bessent said the administration 'has put our trading partners on notice that macroeconomic policies that incentivize an unbalanced trading relationship with the United States will no longer be accepted.'
He added that the treasury would use all available tools to counter unfair currency practices.
The report comes as the Trump administration seeks to ease tensions with China and avoid a full-blown trade war. Trump said his first phone call with Chinese President
Xi Jinping
since returning to office was 'very positive.'
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He announced that trade negotiations would resume soon, though a meeting location is yet to be determined.
Following the call, Trump agreed to temporarily reduce tariffs on Chinese goods from 145- 30% per cent for 90 days to make room for talks. In response, China lowered its tariffs on US goods from 125- 10 per cent.
The tariff adjustments have caused major swings in global markets and raised concerns about ongoing disruption to international trade, especially in critical sectors like rare earth minerals.
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