Currency manipulation refers to actions taken by governments or central banks to intentionally influence the value of their currency relative to other currencies in order to gain an advantage in international trade. This can involve various tactics such as buying or selling foreign currencies, setting exchange rates artificially low, or implementing large-scale monetary policies. The purpose is often to make exports cheaper and imports more expensive, thereby boosting a country's own industries and trade surplus.
Full definition
Too many investors saw something else: a return to the bad old days of
aggressive currency manipulation, evidence that the Chinese economy was much weaker than thought, or both.
The vote cited in the ad is actually legislation referring to
currency manipulation abroad — it had nothing to do with farm dust, real or imagined.
Countries engage in
currency manipulation by selling their currencies on exchange markets, which results in a strong dollar while maintaining weak exchange rates for their currencies.
Yesterday, it was the issue of imbalances and the need
for currency manipulation as seen through the eyes of a hegemon in decline.
Trump would also instruct the US trade representative to notify Mexico and Canada of the administration's intention to propose amendments to the deal, which, as CNN reported, «could include measures
on currency manipulation, lumber, country - of - origin labeling and environmental and safety standards.»
But President Donald Trump gave investors little time for respite, accusing Russia and China of
currency manipulation in a tweet Monday, while also lambasting the Federal Reserve for raising rates.
A memo, obtained recently by CNN, says Mr. Trump intends to propose changes to the treaty on issues such
as currency manipulation, lumber, country - of - origin labelling for meat as well as environmental and safety standards.
When it comes to talking
about currency manipulation, the focus is usually on China — but some countries are far closer to meeting the US Treasury Department's criteria for the term.
What's more, Trump's administration will likely empower the executive branch to deal
with currency manipulation, especially against China, which as often been accused of artificially strengthening the value of its currency, the yuan, so that it could sell its products and services more cheaply abroad.
Despite strident comments about
alleged currency manipulation by China, but not Japan, there is little doubt that the Reserve Bank of Australia will implement a variety of measures to weaken the Australian dollar.
But
Chinese currency manipulation has largely ceased, and there's some anxiety that any Trump attempt to renegotiate trade deals could trigger retaliatory tariffs and harm globalized manufacturers — including American tech companies like Apple (APPL).
Japan, South Korea and Thailand also ran current account surpluses of more 3 % of GDP, which is the limit
under currency manipulation standards.
While Beijing has allowed the renminbi to weaken over the last 18 months, it doesn't want a disorderly rout that would both trigger panic at home and invite fresh accusations of
currency manipulation from the new U.S. President.
A central problem is
defining currency manipulation in a way that excludes the United States — in particular, the Federal Reserve's post-recession stimulus campaign, which had the effect of weakening the dollar much in the same way that other countries do to their currency.
Trump has repeatedly accused Beijing of unfair trade practices
like currency manipulation — which helps China make its exports more affordable — and of stealing US intellectual property.
Trade deals must enforce labor and environmental standards, eschew patent extensions and intellectual property rules that are more in line with protectionism than free trade, and
block currency manipulation.
For years, Trump has argued that China subsidizes its exports to the U.S.
through currency manipulation, creating a trade imbalance (Never mind that the U.S. Treasury disagrees with him).
Scott Paul, president of the Alliance for American Manufacturing, said his group is hoping that opening up NAFTA could provide more leeway to
combat currency manipulation in countries outside the agreement.
And despite this overriding political calculus, these remarks are on to something — Beijing's
currency manipulation gives China a competitive advantage in global trade, and its abuse of intellectual property rights ought to be condemned.
* Bipartisan group of lawmakers is behind the letter * Japan's entry into trade talks has raised concern By Doug Palmer WASHINGTON, May 30 (Reuters)- Nearly 200 U.S. lawmakers have signed a letter urging President Barack Obama to insist on new rules
against currency manipulation in a proposed trade agreement with Japan and 10 other countries in the Asia - Pacific region.
- Mercedes Outsources R - Class Production - GoPro Mount Standard on New Tacoma - Plans for a New Mitsubishi Sedan Stall - Acura Hits 2 Million Milestone In U.S. - Detroit Automakers
Fight Currency Manipulation - Who Saves More Fuel?
There's no doubt that drone strikes and
currency manipulation deserve more attention and thought than they currently get in the public discourse.
For years, Republican officials have demanded that the Obama administration hold China accountable
for currency manipulation, and even President George W. Bush wasn't afraid to rely on higher tariffs to support U.S. steelmakers.
Discussions by the US of alleged
currency manipulation by China are in the economic realm what discussions of changing the «One China» policy are in the geopolitical realm — unconstructive at best and possibly dangerous.
Among the proposals getting short shrift from one or both chambers: the Bush - era tax cuts; all 12 annual spending bills; the arms control treaty with Russia; the defense bill; «don't ask, don't tell»; child nutrition; food safety; renewable electricity;
Chinese currency manipulation; net neutrality; and cybersecurity.
EEM — iShares MSCI Emerging Markets Index — Many view the Fed's actions
as currency manipulation, with the US exporting a weak currency and inflation around the world.
The trade deal could also give the U.S. leverage to negotiate an end to
currency manipulation, which keeps the value of some U.S. trading partners» currencies artificially low.
Trump has repeatedly called China out for
its currency manipulation, and he's determined to bring manufacturing — and manufacturing jobs — back to the U.S. (Trump has even promised to force Apple to start making its iPhones and iPads in America, though it's unclear how he'd accomplish this.)
In addition, right off the bat, Trump would submit legislation related to
currency manipulation and review if trading partners engage in «harmful» practices.
On the campaign trail, Trump attributed the deficit to what he deemed «unfair» trade policy; he charged China, in particular, with
currency manipulation.
Trump's meeting with China's president on Friday was highly - anticipated on the heels of Trump's campaign, during which he repeatedly blasted China for
currency manipulation and unfair trade policies with the US.
Finally, the issue of
currency manipulation is one that Trump could likely court international support to address.
That doesn't mean that
currency manipulation isn't a problem.
In April the U.S. Treasury Department put five countries on
a currency manipulation «monitoring list,» including China, Taiwan, Japan, Germany, and South Korea.
Other countries including, NAFTA partners Mexico and Canada, as well as the United Kingdom, also are likely victims of
currency manipulation.