BREAKING NEWS Justice Ruth Bader Ginsburg dead at 87 Full Story

Mnuchin says he's watching China's currency moves as the trade war escalates

US Treasury Secretary Steven Mnuchin is keeping a close eye on China's currency as the trade war between the...

Posted: Oct 11, 2018 1:42 PM
Updated: Oct 11, 2018 1:42 PM

US Treasury Secretary Steven Mnuchin is keeping a close eye on China's currency as the trade war between the two countries escalates.

After meeting with China's central bank governor on Thursday, Mnuchin told CNN that he has been "carefully monitoring" the yuan's decline against the dollar.

Asia

Banking, finance and investments

Business, economy and trade

China

Continents and regions

Currencies

Donald Trump

East Asia

Economy and economic indicators

Exchange rates

Financial markets and investing

Foreign-exchange markets

Government and public administration

Government bodies and offices

Money, banknotes and coins

North America

Political Figures - US

The Americas

United States

US federal government

White House

Beijing

International trade

Trade and development

Business figures

Securities trading

Steven Mnuchin

Stock markets

Economic policy

International trade law

Tariffs and customs

Trade regulation and policy

Trade wars

Monetary policy

Unrest, conflicts and war

"If someone intervenes to support their currency, that's fine," Mnuchin said in an interview in Bali, Indonesia. "If someone intervenes to devalue their currency, that's not fine."

In the past six months, the yuan has dropped more than 9% against the US dollar. And there are growing signs that the country's currency may fall to 7 yuan to the greenback — a threshold not crossed since before the 2008 financial crisis.

Mnuchin's Treasury Department is due to send its twice-a-year report on currencies to Congress next week. Speaking Thursday on the sidelines of an International Monetary Fund conference, he didn't comment on whether the report would label China a currency manipulator.

The yuan's sharp depreciation has fueled accusations from President Donald Trump that China is deliberately devaluing its currency — claims Beijing has repeatedly rejected.

The currency has been falling partly because of fears that the trade war will hurt the Chinese economy. A weaker yuan helps to offset the impact of tariffs by making Chinese goods cheaper for Americans to buy.

Beijing's role

Chinese Foreign Ministry spokesman Lu Kang said on Tuesday that Beijing was not using its currency as a tool in the trade rift to make exports cheaper. He also dismissed such suggestions as "groundless and irresponsible."

The Chinese government plays a significant role in setting the value of the yuan and how it trades.

Economists generally agree Beijing may have kept its currency artificially low in the past, but they are skeptical that the government has driven it down against the dollar and other major currencies this year.

China's currency, also known as the renminbi, has declined amid an escalating trade war with the United States, a slowdown in economic growth and a broader emerging market sell-off.

'The objective is not tariffs'

The Trump administration has slapped new tariffs on Chinese exports worth hundreds of billions of dollars. It is seeking to gain an edge by upping pressure on China as it struggles with slowing economic growth and sharp declines in the country's stock markets.

China has retaliated with tariffs on a much smaller amount of American goods because it buys far less from the United States than it sells to it.

Mnuchin didn't speculate on whether the president will inflict more economic pain on Beijing through additional tariffs.

"Our objective is to have a more balanced trading relationship and protect our technology and our companies," he said. "The objective is not tariffs. The objective is to open markets."

Trump is expected to meet with Chinese President Xi Jinping at the Group of 20 leaders summit in Buenos Aires at the end of November.

The Trump administration has made currency issues part of its on-off trade negotiations with Beijing.

"We want to make sure that we don't have gains on trade issues only to be offset on currency issues," Mnuchin said.

He said he worked "very closely" with US Trade Representative Robert Lighthizer to add a currency provision in the renewed trade agreement with Mexico and Canada. It would be the "model" the administration would use in future free trade agreements, he added.

Will tensions get worse?

Trump has repeatedly accused China and the European Union of manipulating their currencies, saying it is "taking away our big competitive edge."

He has also complained that the Federal Reserve's rate hikes are moving too fast.

Higher interest rates have strengthened the dollar, making it more attractive for investors to hold assets in the greenback compared with other currencies.

"The Fed is making a mistake," Trump told reporters Wednesday. "They're so tight. I think the Fed has gone crazy."

Despite Trump's criticisms, the Treasury Department has so far stopped short of labeling China a currency manipulator.

If it were to do so this month, the move wouldn't immediately trigger any US penalties, but it would further inflame the tensions between the world's two largest economies.

West Lafayette
Clear
60° wxIcon
Hi: 67° Lo: 40°
Feels Like: 60°
Kokomo
Clear
55° wxIcon
Hi: 64° Lo: 37°
Feels Like: 55°
Rensselaer
Clear
52° wxIcon
Hi: 64° Lo: 37°
Feels Like: 52°
Fowler
Clear
52° wxIcon
Hi: 64° Lo: 37°
Feels Like: 52°
Williamsport
Clear
54° wxIcon
Hi: 66° Lo: 38°
Feels Like: 54°
Crawfordsville
Clear
52° wxIcon
Hi: 66° Lo: 40°
Feels Like: 52°
Frankfort
Clear
50° wxIcon
Hi: 64° Lo: 38°
Feels Like: 50°
Delphi
Clear
54° wxIcon
Hi: 67° Lo: 38°
Feels Like: 54°
Monticello
Clear
54° wxIcon
Hi: 66° Lo: 38°
Feels Like: 54°
Logansport
Clear
54° wxIcon
Hi: 64° Lo: 36°
Feels Like: 54°
Below normal temperatures & patches of frost in the north & northeast.
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 108646

Reported Deaths: 3478
CountyConfirmedDeaths
Marion20341757
Lake10013312
Elkhart6198106
St. Joseph586796
Allen5785198
Hamilton4600109
Vanderburgh318126
Hendricks2607120
Monroe224336
Johnson2241122
Tippecanoe211313
Clark205056
Porter197843
Cass19209
Delaware180159
Vigo169621
Madison153075
LaPorte134837
Floyd127961
Howard125163
Kosciusko116717
Bartholomew113257
Warrick104134
Marshall97423
Boone93846
Dubois92118
Hancock89242
Noble86432
Grant85132
Henry73424
Jackson7259
Wayne72214
Morgan68038
Shelby65529
LaGrange62811
Daviess61627
Dearborn61428
Clinton59111
Harrison54824
Putnam5098
Lawrence49928
Montgomery49421
White47114
Knox4659
Decatur44739
Gibson4344
DeKalb42511
Miami4202
Greene40935
Fayette40413
Jasper3732
Scott34410
Steuben3447
Sullivan32612
Jennings30512
Franklin29225
Posey2900
Clay2855
Orange27924
Ripley2768
Carroll26713
Wabash2547
Washington2491
Whitley2456
Wells2422
Starke2387
Jefferson2363
Adams2303
Fulton2292
Tipton21522
Huntington2073
Randolph2047
Perry20014
Spencer1984
Jay1640
Newton16411
Owen1621
Martin1560
Rush1484
Pike1331
Vermillion1210
Fountain1152
Pulaski1121
Blackford1072
Crawford980
Brown933
Parke902
Benton880
Union760
Ohio757
Switzerland660
Warren381
Unassigned0225

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events