Remember what we said on Friday when the Treasury confirmed what Donald Trump had already tipped? Namely that the US would not be labeling China a currency manipulator?
Here, we’ll remind you:
So for now, in the interest of accommodating China at a time when Beijing is a necessary ally given the turmoil on the Korean Peninsula, Trump is going to let sleeping dogs lie.
But we’d imagine once someone explains the nuances to him (namely that if he wants to really get a picture of what’s going on, he’ll need to watch the trade-weighted basket as well as the bilateral rate), the President might eventually change his mind. Especially once the situation in Pyongyang gets “resolved.”
See, what the administration and the Treasury would like you to believe is that everyone suddenly realized that China has in fact been on a veritable quest to keep the yuan from falling over the past 19 months. In fact, they’ve spent more than $1 trillion of their FX reserves in an effort to control the yuan’s downward trajectory. So you know, the US is taking that into consideration.
Whatever. This was all a political gambit designed to keep Beijing happy in case Trump decided he needed to “address” the situation in Pyongyang.
Oh, he almost forgot…
Finally, we got this on Sunday morning as well:
- H.R. MCMASTER SAYS NORTH KOREAN PROBLEMS ARE `COMING TO A HEAD’
[Aside: Trump’s question makes no sense. Whether or not China manipulates their currency has exactly nothing to do with North Korea’s missile program.]