WASHINGTON — The Trump administration is dropping its designation of China as a currency manipulator in advance of the signing Wednesday of a Phase 1 U.S.-China trade agreement.
The preliminary pact that the two sides are set to sign this week includes a section that’s intended to prevent China from manipulating its currency to gain trade advantages.
The action announced Monday comes five months after the Trump administration had branded China a currency manipulator — the first time that any country had been so named since 1994 during the Clinton administration.
Even while removing China from its currency black list, the Treasury Department does name China as one of 10 countries it says require placement on a watch list that will mean their currency practices will be closely monitored. In addition to China, the countries on that list are Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland and Vietnam.
Treasury Secretary Steven Mnuchin said the administration had dropped China’s designation as a currency manipulator because of commitments in the Phase 1 trade agreement that President Donald Trump is to sign with China on Wednesday at the White House.
“China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability,” Mnuchin said in a statement accompanying the currency report.
Some critics of China’s trade practices criticized the administration’s decision Monday.
“China is a currency manipulator — that is a fact,” said Sen. Chuck Schumer of New York, the Democratic leader in the Senate. “When it comes to the president’s stance on China, Americans are getting a lot of show and very little results.’”
The Treasury Department is required to report to Congress twice a year in April and October on whether any countries are manipulating their currencies to gain unfair trade advantages against U.S. businesses and workers.