United States designates China as currency manipulator
The United States has designated China a “currency manipulator”, following the devaluation of the Yuan. The move could escalate the tense trade relations between the two nations. The US action came after China allowed its yuan to weaken past the key seven-per-dollar level for the first time in more than a decade. This decision will engage with the International Monetary Fund (IMF) to eliminate the unfair competitive advantage created by China’s latest actions. The decision to label China as a currency manipulator for the first time since 1994 comes just 4 months after the U.S. Treasury passed on an opportunity to make such a formal designation as part of its semiannual currency report. The Treasury uses three criteria to apply the designation: actively intervening in their currency markets, having large trade surpluses with the U.S., and having large overall current-account surpluses.