The U.S. Treasury Division Monday withdrew its designation of the Chinese Yuan as a currency manipulator before high officers of the world’s two largest economies had been due to sign a Phase 1 trade deal to ease an 18-month-old tariff row.
The widely anticipated decision came in a long-delayed semi-annual currency report, reversing a sudden shift by Treasury Secretary Steven Mnuchin last August at the peak of U.S.-China trade strains.
Mnuchin had accused China of intentionally holding down the value of its yuan currency to create an unfair trade benefit, hours after President Donald Trump, raged at the lack of progress in trade talks. Mnuchin had also accused China of manipulating its currency.
The Treasury Division had not designated China as a currency manipulator since 1994. Beijing had recently met simply one of the division’s three standards needed for such a designation – a large bilateral trade excess with the U.S.
In its newest currency report, the Treasury said that as a part of the Phase 1 trade agreement, China had made “enforceable commitments to refrain from aggressive devaluation” and agreed to publish related data on trade rates and external balances.
Chinese VP Liu He visited Washington Monday for a White House ceremony to ink the trade agreement with Trump. Individuals familiar with the discussions stated that though the manipulator designation had no real consequences for Beijing, its withdrawal was an important sign of goodwill for Chinese officers.
U.S. Trade Representative Robert Lighthizer Monday said that the translation of the U.S.-China trade deal was nearly completed, and the text of the agreement would be published Wednesday before the ceremony.