The U.S. Treasury avoided labeling China as a currency manipulator in its recent congressional report while strongly condemning Beijing for its unclear exchange-rate management practices.
The announcement occurred on Thursday as the Trump administration works to restart trade negotiations with China to reduce the escalating tensions regarding tariffs and worldwide supply networks. The Treasury Department will keep monitoring Beijing’s currency practices but may establish China as a currency manipulator later this year if fresh evidence appears.
The situation exists in a sensitive state. During President Trump’s first presidential term the Treasury Department designated China as a currency manipulator in 2019 before removing this designation in 2020. Treasury Secretary Scott Bessent announced that the administration will monitor trading partners including China because currency policies that create trade imbalances will face no tolerance.
During their first phone call since Trump returned to office Trump reported having a “very positive” discussion with Chinese President Xi Jinping about trade matters including essential rare earth materials. Trump announced that his teams would soon meet at an unspecified location.
The administration decided against reapplying the currency manipulator label because they want to maintain economic stability while pursuing their trade negotiation objectives.
