Posted on 08/14/2019 2:21:10 PM PDT by Tolerance Sucks Rocks
The U.S. Treasury Department has incorrectly labeled China a manipulator of its currency.
An important distinction exists between devaluing a currency and currency depreciation.
Devaluing implies the Peoples Bank of China actively manipulated the value of the Chinese renminbi to gain unfair advantage for its exports. Depreciation simply means the renminbi has lost purchasing power relative to the U.S. dollar, based on market forces.
Theres no indication that China is actively devaluing its currency.
However, according to the Treasury Department, China met a broad definition of manipulation laid out in the Omnibus Trade and Competitiveness Act of 1988, which says of the Treasury secretary:
"The Secretary considers that such manipulation is occurring with respect to countries that (1) have material global current account surpluses; and (2) have significant bilateral trade surpluses with the United States."
The law itself doesnt make clear what a significant level of trade surplus with the U.S. equals.
Like many things Congress does, it leaves the most critical details of the law to the executive branch to determine. It must do so, because the criteria laid down in the law could implicate any number of countries, such as Japan, India, Taiwan, Thailand, and South Korea.
And the U.S. trade deficit with the European Union is more than $100 billion.
Yet, the criteria Treasury used in this case are different from another criterion it uses to monitor and label currency manipulators based on the Trade Facilitation and Trade Enforcement Act of 2015.
(Excerpt) Read more at dailysignal.com ...
This is just not true.
The People’s Bank Of China (PBOC), their central bank, sets a target for their currency (they call the “fix”).
They intervene routinely to keep it there.
They explicitly changed the fix, to devalue their currency, and said so openly.
I tend to agree.
Thanks for the clarification. WTH is wrong with Heritage nowadays?
I noticed FOX Business was swarming with never-Trumpers today, like Charlie Gasparino and some former Bush people, slamming Trump for beating up on their Chinese buddies, by saying “there’s a better way of dealing with China other that tariffs, blah blah blah”
I don’t see them manipulating their currency down now, but up.
It’s the US dollar that’s changed, not so much the Yuan.
The Yuan has lost about what the Dollar has gained.
... though the Yuan has weakened, so have every other currency in Asia.
But I think it is a good move for Trump to get ‘manipulation’ claim in motion. China may make huge interferences soon.
Ha!
I was just wondering if China may confiscate it’s people’s gold to get thtough this mess.
Your source is wrong, and there are more sources that bear out the truth of what they are doing in desperation to keep things afloat. Trump cut them some slack to Dec 1st to minimize price issues before Christmas but he has them squarely in his sights
The stupid hurts. Beyond all understanding, stupid.
Yes, China regulates the value of its currency. And in the past it did so to keep it artificially low. But in recent years China has been supporting the value of the Yuan. Point in fact if they ceased “manipulating” their currency and let if float freely on the world’s currency exchange, I believe it would loose a quarter or more of its value v the USD very quickly.
I actually think there WAS a better way: a blizzard of complaints to the WTO on unfair trade practices by our partners. With 90% of our complaints being resolved in our favor normally, that would have worked out well for us, IMO.
That horse has already left the barn however. Trump is going with tariffs. He apparently doesn’t worry about the super-national WTO. With the exception of the general tariff on steel and aluminum — he can tariff these two things to the sky, for all I care, when it comes to imports from our adversaries — I support his effort.
The alternative, realistically, would be to simply support the status quo ante, which means further devolution of America into a strictly service economy as nefarious countries capture more and more of our manufacturing. WE would effectively become a client state of Europe, China, South America and the Middle East.
Pain in the short term, gain in the long term, hopefully.
“WTH is wrong with Heritage nowadays?”
It is a valid argument, that a fair market valuation of China’s currency would result in it being valued lower.
But that is different from saying that China does not manipulate its currency. Both can be true, and are.
Treasury was not wrong to say that China is a currency manipulator, AND, the free market would devalue the Yuan more if it truly floated freely.
China has been supporting its currency from devaluation for the last few years, with a host of measures, including harsh capital controls, and direct interventions in the market.
They brag that they have developed a powerful suite of tools that allow them to effect the exchange rate of the Yuan, without relying on using their foreign exchange to directly intervene in the market themselves (like ordering their big businesses to take or refrain from actions).
It was a deliberate Government policy move to let the Yuan weaken over 7 to the dollar, to offset tariffs, and that is a violation of trade rules.
“I dont see them manipulating their currency down now, but up.”
They have to support their currency, to keep it pegged to the dollar.
They chose to adjust that peg, precisely to offset tariffs - which is what is forbidden by the trade rules.
If China’s economy implodes at some point, a significant devaluation of their currency is likely to be either a major cause, or a major effect.
A lot of things in China’s economy are not really worth what they say, and their currency is one of them.
“I think it is a good move for Trump to get the manipulation claim in motion. China may make huge interferences soon.”
The designation may have been (probably was) more to prevent such bigger future actions by China, than to address the recent move past 7 to the dollar.
Lets them know we are watching like hawks.
“I was just wondering if China may confiscate its peoples gold to get through this mess.”
China has been building up Gold reserves over the last year (kind of steady, not dramatically, but significantly).
If things hit the fan, anything goes with the communists. It is not too practical to go after individual’s gold in their homes, but large deposits in banks, as well as accounts based in foreign currencies, could be some prime targets.
I think they actually don’t have the wherewithal to support the Yuan so much (despite their claims).
But if this fits the technical description of
‘manipulation’... good!
Does Riley Walters receive his pay from China in dollars? That might explain his view on this.
The US is always a hypocrite about currency manipulation, since the dollar calls the tune for the rest of the world, and bounces values to suit our needs (I can live with being a hypocrite). In this instance, every appearance is that China devalued their currency to maintain a price advantage on exports affected by Trump’s tariffs. What that does to China’s internal economy, and the purchasing power in China internally is beyond me. Did T. just pull back from further tariffs to prevent the Chinese devaluing below a certain threshold no one seems to want to breach?
Did they offer any suggestions to support their claim?
Or were they just out to spread poison?
This Bushbots were never on our side. Big surprise they can’t grasp what’s going on now.
They think Trump is ruining the nation.
Absolutely clueless...
dailysignal.com = China apologist.
“Not worth what they say.....” Would that include the many completely empty cities that have been touted to show the “boom” in their economy to the world.
Potemkin empty high rise buildings... and nobody there. Sort of like the empty North Korean town across the river from S. Korea-— totally empty.
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