The president has long accused China of depressing the yuan’s value to make its products more affordable for foreign customers, thus contributing to the chronic trade imbalance with the United States.
As a presidential candidate, Trump promised to brand China as a manipulator in his first day in office. Instead, Treasury Secretary Steven Mnuchin opted not to designate China in 2017 or 2018, since Beijing’s behavior did not meet specific criteria detailed in a 2015 law.
In August, Mnuchin added China to the list in response to pressure from the president, even though many economists said the label was incorrect.
Mnuchin’s decision came at a time when China was not intervening in currency markets the way it had in the years after it joined the World Trade Organization in 2001. China’s once-sizable global trade surplus is roughly one-tenth its 2007 size.
With the United States and China calling a truce in their two-year-long trade conflict, the Treasury Department’s about-face this week is not seen as a surprise. Labeling a country a “currency manipulator” is a mostly symbolic step that requires Treasury Department officials to launch consultations with the offending nation.
The person describing Monday’s decision was not authorized to reveal the announcement and spoke on the condition of anonymity.