US removes 'currency manipulator' label from China ahead of trade deal

The United States announced on January 13 that they have removed the label of ‘currency manipulator’ imposed on China, as both countries are set to sign the ‘phase one’ trade deal on Wednesday. The US treasury department, in a statement, said that it assessed China’s currency practices and the developments over the last several months, in an apparent reference to the impending deal.

“The Treasury Department has helped secure a significant Phase One agreement with China that will lead to greater economic growth and opportunity for American workers and businesses,” said U.S. Treasury Secretary Steven T. Mnuchin.

“China has made enforceable commitments to refrain from competitive devaluation while promoting transparency and accountability,” he added.

The treasury department submitted the semiannual report on macroeconomic and foreign exchange policies of 20 major trading partners. Though it has removed the label of ‘currency manipulation’, the report found that 10 countries merit close attention to their currency practices. Other nine countries placed on the monitoring list are Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore, Switzerland, and Vietnam.

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China’s Vice Premier in Washington

China’s Vice Premier Liu He is in Washington to sign the much-awaited ‘phase one’ trade deal which opens the door for further negotiations. The confirmation came after US President Donald Trump announced that he will be signing a “comprehensive” trade deal, at the White House, in the presence of high-level representatives from China.

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Earlier, Trump had claimed that China, during the ‘phase one’ deal, agreed to many “structural changes” and “massive purchases” of agricultural product, energy, and manufactured goods, among others. The US trade representatives had also confirmed the ‘historic and enforceable agreement’ with China on Phase One trade deal. It said that the US will be maintaining 25 per cent tariffs on approximately $250 billion of Chinese imports, along with 7.5 per cent tariffs on approximately $120 billion of Chinese imports.

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(With inputs from agencies)