Business

Trump accuses China of 'manipulating' its currency


Image copyright
Reuters

Image caption

Donald Trump sits for an interview with Reuters

US President Donald Trump has accused China of manipulating its currency to combat US tariffs.

The accusation, made in an interview with Reuters news agency, resembles claims Mr Trump made during his 2016 campaign but had avoided more recently.

It comes as the two countries prepare to meet in Washington this week to discuss the ongoing trade fight.

Many doubt that the talks, which involve lower level officials, will be successful at defusing the tensions.

Mr Trump told Reuters he does not expect much out of the meeting, which follows failed negotiations this spring.

He also said he had “no time frame” in mind to bring the clash between the economic giants to a close.

Trade war in progress

In July, the two countries imposed a first round of tit-for-tat tariffs, on trade worth $34bn.

The US plans to impose import duties on a further $16bn (£12.5bn) in Chinese trade on 23 August. China has promised to retaliate in kind.

The administration is also preparing additional tariffs on $200bn worth of Chinese goods, which are the subject of hearings in Washington this week.

This month, the administration announced that Mr Trump had asked his staff to consider taxes of 25%, instead of the 10% initially proposed.

At the time, officials disputed the notion that the higher tax was a response to the decline in the value of the yuan, but the president’s comments to Reuters undermine that claim.

“I think China’s manipulating their currency, absolutely,” Mr Trump told Reuters.

During his campaign for president, Mr Trump also called China a currency manipulator but last year, after assuming office, he walked back those comments.

Blame at home

China’s currency has shed almost 10% of its value against the dollar since the trade dispute started to intensify in April – a decline that has blunted the effect of the tariffs by making China’s goods cheaper.

Image copyright
EPA

Image caption

Rising tensions are reflected in this Guangzhou poster, which says the restaurant will charge US costumers more due to the trade war

Mr Trump said he held the US Federal Reserve responsible for some of the currency shifts, noting that it has acted more quickly than other central banks to remove stimulus policies.

“We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” he told Reuters.

In addition to China, he said, “I think the euro is being manipulated also.”

‘Not thrilled’

President Trump also again criticised the Federal Reserve for raising interest rates.

The US central bank, which is led by Mr Trump’s appointee Jerome Powell, has raised interest rates twice this year and is expected to do so again.

The Fed has said the economy is strong enough to handle higher rates, which are intended to prevent uncontrolled price inflation. Analysts also link the rates to a stronger dollar.

Mr Trump is worried that the higher cost of borrowing will slow the economy.

“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” he said to Reuters, repeating a criticism which he has made before.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *