Treasury says China manipulating currency

Treasury Secretary Steven Mnuchin on Monday determined China is manipulating its currency and will engage with the International Monetary Fund (IMF) to eliminate the “unfair competitive advantage” created by the country’s latest actions, Treasury said in a press release Aug. 5.

“In recent days, China has taken concrete steps to devalue its currency while maintaining substantial foreign exchange reserves despite active use of such tools in the past,” Treasury said. “The context of these actions and the implausibility of China’s market stability rationale confirm that the purpose of China’s currency devaluation is to gain an unfair competitive advantage in international trade.”

The executive branch statutorily is required to increase bilateral engagement with countries it determines are manipulating currency.

In its last biannual report to Congress on foreign exchange policies of major U.S. trading partners sent in May, Treasury found that China met only one of the three criteria necessary to be designated as a currency manipulator — a significant bilateral trade surplus with the U.S.