Trump Balks On Chinese Currency Manipulation
In an interview with the WSJ President-elect Trump has stated he won’t call China a currency manipulator on the first day. There should be backlash from the Trumpsters following this cave by Trump. If so, it is likely to result in a tweet sometime over the next 24 hours from DJT saying he was misunderstood and China is in fact a manipulator.
In the same WSJ article Trump said “they certainly are manipulators”. Well, DJT, call them that as you said you would once sworn in. During the campaign Trump called China a currency manipulator multiple times. It was refreshing to have a candidate for federal office who would speak the truth on China’s manipulation.
It is a matter of daily activity for the Communist People’s Bank of China (PBoC) to manipulate the FX market and their domestic money market to manage the inflows of currency resulting from their massive trade surplus in order to peg the Yuan to the U.S. dollar at levels they deem advantageous to maintain their mercantilist export dependent trade policy.
China, through their daily manipulation practices, has devalued the Yuan against the U.S. dollar over the past two years from 6.2 to 6.9 Yuan per dollar, an 11.3 percent increase in the value of the dollar and an 11.3 percent decrease in the value of the Yuan; advantage China. This has helped China fend off recession, maintain a high level of exports to the U.S., has caused the 2016 U.S. trade deficit to pop to the upside, and has fed disinflation to the U.S. economy allowing the Federal Reserve to maintain low interest rates and further inflate asset bubbles while robbing retirees of needed savings.
Bush 41, Clinton, Bush 43, Obama and most members of Congress all have balked at calling out China for what they are; a currency manipulator. They failed to call out China’s exchange rate policy as a key driver for America’s $400 billion annual merchandise trade deficit with China.
Trump must follow through on his pledge to call out China for what they are on day one: a currency manipulator. The practice is killing us.