The U.S. and China are looking beyond tariffs for options to crank up the pain in their escalating trade battle.
The options run from the relatively symbolic to the truly ugly — but neither of the world’s two largest economies are showing signs they intend to stand down.
Next up for the Trump administration: potentially labeling China a currency manipulator.
The Treasury Department is considering the move in a report set for release next week, Bloomberg News’s Saleha Mohsin reports. “Declaring China to be a currency manipulator wouldn’t trigger any sanctions or other U.S. penalties, but it would escalate trade tensions, would likely upset markets and could pave the way for other actions down the road,” Mohsin writes. Treasury Secretary Steven Mnuchin has authority to apply the label, a step the United States hasn’t taken since 1994, and he tells the Financial Times that the department is monitoring the issue “very carefully”.
President Trump campaigned on the threat, accusing Beijing of holding down the value of the yuan to boost its exports. But he reversed himself upon taking office. The currency’s recent performance — it has dropped 9 percent against the dollar in the past six months and this week has drawn close to its lowest levelsince January 2017 — has stoked speculation on the Trump team that the Chinese are deliberately depressing its value. And there are signs the Chinese could tolerate it weakening further…
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