The Trump administration has named China as a “currency manipulator” after the Chinese central bank allowed the renminbi to weaken to below Rmb7 to the dollar, in the latest shock to the Sino-US relationship.
The US Treasury made the determination on Monday, hours after Donald Trump had again slammed China for the weakening of its currency, which the US president has repeatedly described as an unfair trade practice.
“China has a long history of facilitating an undervalued currency through protracted, large-scale intervention in the foreign exchange market,” Treasury said. “In recent days, China has taken concrete steps to devalue its currency, while maintaining substantial foreign exchange reserves despite active use of such tools in the past.”
The designation came after US stocks recorded their biggest one-day drop this year and after bond yields plunged following the move by China to let the renminbi fall through a key threshold, escalating the trade war between Beijing and Washington.
Mr Trump on Friday said he would impose tariffs on another $300bn of Chinese goods, shattering a truce that he reached with Chinese president Xi Jinping in June.
The US decision to slap more tariffs on China, coupled with the easing of the Chinese currency — a move that some experts viewed as retaliation — raised fresh concerns about global growth with no end to the more than year-long trade war in sight.