President Trump Finance Minister Steven Mnuchin personally urged China to be called a "currency manipulator" two weeks ago, a move Mnuchin had previously resisted.
Trump's print revealed a stronger role for the West Wing in the highly controversial decision. Mnuchin had repeatedly refused to designate China as a currency manipulator because China's currency movements did not meet the Ministry of Finance's criteria for this action.
However, Trump put immense pressure on him earlier this month after the Chinese admitted their currency, the yuan
This happened following an escalation in the trade dispute when Trump announced that he would import additional Chinese exports 300 billion US dollars will be charged with a 10 percent tariff, and the Chinese promised retaliatory measures. (This week, Trump delayed some of these new tariffs out of concern for what they would do to the US economy during the holiday season.)
The Chinese yuan weakened this year, but there were varying explanations as to why. Trump claimed that the Chinese government deliberately weakened its currency to gain an advantage over US companies. When a country weakens its currency, it makes its exports cheaper and more competitive.
However, some international economists have found that the Chinese currency has weakened due to independent market forces, including a deterioration in the Chinese economy. The Treasury Department only refused to designate China as a currency manipulator in May, even though Trump has been concerned since his term as president.
There are two federal laws that require the Finance Minister to designate certain countries as currency manipulators. The manipulation of currencies often has strong international resonance as it distorts the currency and trade markets and distorts the flow of goods worldwide.
This refers to the federal laws that authorize the Minister of Finance to designate a country as a "currency manipulator" in order to protect the process from political interference, they set certain criteria that must be met for the designations to be made.
In the nomination of August 5, the tax officials did not state what had changed after their announcement of May 28, China cleared. Instead, it referred to public statements by the Chinese government to affirm its active role in controlling the currency.
"In recent days, China has taken concrete steps to devalue its currency despite maintaining substantial foreign exchange reserves. In the past, such tools have been actively used," said the Treasury. "The context of these measures and the implausibility of the reasons for China's market stability confirm that the purpose of currency depreciation is to put an unfair competitive advantage on international trade."
White House and Ministry of Finance spokespersons declined to comment.
One of the people who knew Trump's pressure on Mnuchin said the White House wanted China to be classified as a currency manipulator to push Chinese officials back to the negotiating table. This has proved unsuccessful so far. Instead, it has triggered tensions between the two countries.
The three individuals spoke with the Washington Post on condition of anonymity that they were not authorized to disclose the discussions.
Conveniently, China was Called Currency The Manipulator merely begins a discussion process between the Ministry of Finance and the International Monetary Fund, although the IMF does not agree with the designation of the Ministry of Finance.
Trump increasingly complained that the strong US dollar is hurting the US economy. He attributed this momentum to both the Chinese government and the Federal Reserve, although many companies and investors said it was a result of the White House's controversial trade agenda.