President Trump on Wednesday accused China and Europe of playing a “large currency manipulation game.” He stated the US should match that effort, a move that directly contradicts official U.S. policy not to manipulate the dollars’ worth to gain trade benefits.
In a tweet, the president mentioned if America doesn’t act, the nation will continue “being the dummies who sit back and politely watch as different countries continue to play their games as they have for so many years.”
Trump’s own Treasury division in May found that no nation meets the factors of being labeled a forex manipulator, though the report did put China and 8 other countries on a watch list.
A country manipulates its currency when it falls down the worth to make its exports cheaper and foreign imports more expensive.
As a candidate in 2016, Trump repeatedly charged that China was manipulating its currency, and as president, he would instantly label China as a currency manipulator.
Nonetheless, after taking office, Trump’s Treasury Department has issued five studies on the topic, required by law every six months. In each report, it mentioned no nation met the criteria to be labeled a currency manipulator.
A weaker dollar would boost U.S. exports however could run the risk of inflicting foreign traders who are helping to finance the federal government’s $22 trillion national debt to move their investments elsewhere to avoid the risk of currency depreciation lowering their returns.