Senator Chuck Schumer, the top Democrat in the US Senate, urged President Donald Trump on Tuesday to implement one of his campaign promises and declare China a currency manipulator.
“Mr. President: if you really want to put America first, label China a currency manipulator,” Schumer told reporters.
Trump’s Treasury secretary nominee Steven Mnuchin recently told senators that he would work to combat currency manipulation but would not give a clear answer on whether he currently views China as manipulating its yuan, according to a Senate Finance Committee document seen by Reuters on Monday.
Trump previously said that he would name China a currency manipulator on his first day in office.
Notably, there are three criteria that must be met for a country to be labeled a currency manipulator by the Treasury Department:
The country must have a significant bilateral trade surplus with the US. The country has a "material" currency account surplus. The country is engaged in persistent one-sided intervention in the foreign exchange market.
In their semi-annual April report, the Treasury created a "Monitoring List" of major trading partners that "merit attention based on an analysis of the three criteria." China was among those added to the list.
Once a country is added to the list, it is kept on there for at least two consecutive reports.
That being said, the Treasury noted that while China met two out of the three criteria in the April report (a large bilateral trade surplus and a current account surplus above 3%), it met only one of the three criteria in the October report (the large bilateral trade surplus.)
The major trading partners included on the list as of the October 2016 report are China, Japan, Korea, Taiwan, Germany, and Switzerland.
The last time the US designated China a currency manipulator was from 1992 to 1994.
(Reuters reporting by David Morgan; editing by Eric Walsh)