[CTC] Trump Won’t Label China a Currency Manipulator

Thu Apr 13 08:14:10 PDT 2017

Three articles below...

https://www.wsj.com/articles/trump-says-dollar-getting-too-strong-wont-label-china-currency-manipulator-1492024312 <https://www.wsj.com/articles/trump-says-dollar-getting-too-strong-wont-label-china-currency-manipulator-1492024312>
Trump Says Dollar ‘Getting Too Strong,’ Won’t Label China a Currency Manipulator

President leaves open possibility of renominating Fed Chairwoman Janet Yellen

Gerard Baker, 
Carol E. Lee and 
Michael C. Bender
April 12, 2017 3:11 p.m. ET 
WASHINGTON—President Donald Trump said Wednesday the U.S. dollar “is getting too strong” and he would prefer the Federal Reserve keep interest rates low.

Mr. Trump, in an interview with The Wall Street Journal, also said his administration won’t label China a currency manipulator in a report due this week.

He left open the possibility of renominating Federal Reserve Chairwoman Janet Yellen once her tenure is up next year, a shift from his position during the campaign that he would “most likely” not appoint her to another term.

 “I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting—that will hurt ultimately,” he added. “Look, there’s some very good things about a strong dollar, but usually speaking the best thing about it is that it sounds good.”

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He continued, “It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency.”

Mr. Trump said the reason he has changed his mind on one of his signature campaign promises is that China hasn’t been manipulating its currency for months and because taking the step now could jeopardize his talks with Beijing on confronting the threat of North Korea.

“They’re not currency manipulators,” Mr. Trump said.

Ms. Yellen was a frequent target of Mr. Trump’s during the campaign, when he criticized her for keeping interest rates low.

Asked if Ms. Yellen was “toast” when her term ends in 2018, Mr. Trump said, “No, not toast.”

“I like her, I respect her,” Mr. Trump said, noting that the two have sat and talked in the Oval Office. “It’s very early.”

Treasury Secretary Steven Mnuchin, who sat in on part of the interview, said the president was “very close” to nominating a vice chairman to the Federal Reserve Board and another to the seat set aside for a community banker. “We think that is very important,” Mr. Mnuchin said about the community banker seat.

Mr. Trump also made a full reversal from the campaign by stating his support for the U.S. Export-Import Bank. The president said he planned to fill two vacancies on the bank’s board, which has been effectively paralyzed with three open seats on its five-member board.

“It turns out that, first of all, lots of small companies are really helped, the vendor companies,” Mr. Trump said. “But also, maybe more important, other countries give [assistance]. When other countries give it we lose a tremendous amount of business.”

The agency, which guarantees loans for international clients of a wide range of U.S. companies, has become a flashpoint in recent years for the Republican Party’s conservative base, which criticizes it as “crony capitalism.”

As he courted these limited-government voters during the campaign, Mr. Trump said the agency was unnecessary, and referred to it as “featherbedding” for politicians and big companies

“Instinctively, you would say, ‘Isn’t that a ridiculous thing,’ ” Mr. Trump said of the Ex-Im Bank. “But actually, it’s a very good thing. And it actually makes money, it could make a lot of money.”

Write to Carol E. Lee at carol.lee at wsj.com <mailto:carol.lee at wsj.com> and Michael C. Bender at Mike.Bender at wsj.com <mailto:Mike.Bender at wsj.com>

Washington Post
Trump says he will not label China currency manipulator, reversing campaign promise
By Ana Swanson <https://www.washingtonpost.com/people/ana-swanson/> and Damian Paletta <https://www.washingtonpost.com/people/damian-paletta> April 12 at 3:46 PM 
President Trump on Wednesday said he would not label China a currency manipulator, contradicting one of the biggest economic promises he made on the campaign trail.

Trump told the Wall Street Journal that he had changed his mind because China is not currently manipulating its currency, adding that he hoped to enlist China’s help on containing the nuclear threat from North Korea.

Trump also indicated that he might be open to keeping Janet L. Yellen as Federal Reserve chair after her term expires. “I like her, I respect her. ... It’s very early,” he said when asking about her reappointment.

Trump was highly critical of Yellen during the campaign. He accused her of keeping interest rates low to benefit the Obama administration and said she should be ashamed of herself. But Yellen has a reputation for being slow to raise interest rates, and Trump had also professed his preference for low interest rates in the past.

“I do like a low-interest rate policy, I must be honest with you,” he told the Journal, when asked about Yellen.

The president is also “very close” to naming a vice chair and filling another open seat that governs community banking on the Federal Reserve Board, Treasury Secretary Steven Mnuchin said during the interview.

In the interview, Trump also inveighed against the strong U.S. dollar, saying that the strength of the currency stemmed partially from people’s confidence in him, but that it was also hurting the economy.

“It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency,” he said.

Eswar Prasad, a professor of international trade at Cornell University, said it was striking that a sitting president would comment so directly on the value of the dollar.

“It could also be taken as an implicit threat to other countries that if the dollar stays strong and if U.S. bilateral trade imbalances with its major trading partners stay high or continue to expand, that he will take some sort of action,” Prasad said.

The judgment on currency manipulation was scheduled to be released in a semiannual report from the Treasury Department that is due this week. China defies international trade rules in some respects, economists say, but devaluing its currency is not currently one of them. While China suppressed the value of its currency for years to make its products cheaper abroad and boost its exports, for the past several years it has been intervening in currency markets to prop the yuan up, which actually benefits American exporters.

“Certainly for the past six months, which is the period notionally covered by the April 15 report, China has been intervening to raise the value of its currency, not to suppress it,” said Matthew Goodman, a former Treasury official who helped to label China a currency manipulator during the Clinton administration.

China was a favored target of Trump’s on the campaign trail. He often said the world's second-largest economy was taking advantage of the U.S., and that he would respond on his first day in office by labeling China a currency manipulator. He has also said he would impose tariffs of up to 45 percent on China if the country does not negotiate better trade terms with the United States.

Labeling a country a currency manipulator triggers an investigation and can eventually lead to tariffs or other economically punitive measures.

But when Trump met with Chinese President Xi Jinping at Mar-a-Lago last week, the conversation was much more genial. The outcome of the talks was a 100-day plan to reevaluate the countries’ trading relationship, including trying to boost American exports to China.

POLITICO
Schumer: Trump's China currency decision 'a green light to steal our jobs'

By Doug Palmer
04/12/2017 04:26 PM EDT
President Donald Trump has given China "a green light" to steal American jobs by breaking a campaign promise and deciding not to declare China a currency manipulator, Senate Minority Leader Chuck Schumer <http://go.politicoemail.com/?qs=e0e8dbe8e54efafc3780d8209f519c32eb51e0208e1b562b9df1013f8d3dca7dce4ffcd6ac4678c4a4fe95a0438c3fc8e3b0bd267025bfda33d67d435e95d169> said today. 
"Unfortunately, the president’s failure to name China a currency manipulator is symptomatic of a lack of real, tough action on trade against China," Schumer said in a statement, after Trump told  <http://go.politicoemail.com/?qs=e0e8dbe8e54efafcbe77f415ef4738bf7cd4668e86900fd64dd6f1d4da7a53dbab0751a888348ac3b18f52995f8943f9aa8dca6ae46b84aef86770ee8c1686bc>The Wall Street Journal that he believes China is no longer manipulating its currency for an unfair trade advantage — a point that contradicts a charge he made repeatedly on the campaign trail.
Trump's reversal came after his summit meeting last week with Chinese President Xi Jinping and ahead of the Treasury Department's semi-annual report on the foreign exchange rate practices of China and other trading partners, which is due by Saturday.
Many economists have pointed out that China is intervening in foreign exchange markets to prop up its currency, not to drive it down to boost exports. But Trump has previously ignored that analysis in favor of lashing out at Beijing.
Schumer has argued that Trump should label China a currency manipulator to fire "a shot across the bow" and deter them from future bad behavior. 
"While they’re not manipulating their currency at the moment, because it doesn’t suit their economic needs, make no mistake about it, as soon as the tide turns, they will," the New York Democrat charged. "When the president fails to label them a currency manipulator, he gives them a green light to steal our jobs and wealth, time and time again."
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