Accusing China of using its currency Yuan to gain “unfair competitive advantage” in trade, the United States has officially labeled China a currency manipulator, reports The Hindu.
The development reportedly comes after Beijing on Monday (5 August) allowed its currency to fall below the politically sensitive level of seven to the US dollar for the first time in 11 years and Chinese firms halted buying US farm produce.
As per the report, the US Department of Treasury on Monday (5 August) night announced, “Secretary (Steven) Mnuchin, under the auspices of President Trump, has today determined that China is a ‘Currency Manipulator’”
Trump, during the campaign for the 2016 presidential elections, had promised to label China as currency manipulator. However, the Department of Treasury kept Beijing on its watchlist and declined to go ahead with the step.
The treasury department said that following the decision, Mnuchin will engage with International Monetary Fund to remove the “unfair competitive advantage” created by China’s latest actions.
“The context of these actions and the implausibility of China’s market stability rationale confirm that the purpose of China’s currency devaluation is to gain unfair competitive advantage in international trade,” the department said in a statement.
As per the report, the move by US could further escalate the ongoing trade tensions between the two economic giants.
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