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Trump stops labelling China a money 'manipulator'

April 13, 2017

The US president's decision has reversed a campaign pledge to punish China for artificially devaluing the Yuan. The change is one of multiple recent events that indicate warming relations between Washington and Beijing.

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China 100 Yuan Scheine
Image: Getty Images/AFP/F. Dufour

In an interview with the US newspaper "The Wall Street Journal" on Wednesday, Trump did an about-face on his campaign promise to categorize China as a "currency manipulator" on the first day of his administration.

"They're not currency manipulators," Trump told the newspaper, further clarifying that Beijing had not been devaluing the Yuan for months. 

The president had previously argued that China artificially devalued their currency in order to boost exports, leading to American job losses and unfair competition for US manufacturers.

Read more: Donald Trump's campaign policy towards China

US Treasury Department officials confirmed that China would not be labeled a currency manipulator in their biannual currency report due to be released later this week. A currency manipulator label for China could have resulted in tariffs on imported Chinese goods.

The reversal suggests a potential shift away from Trump's prior nationalist economic rhetoric towards a more moderate position. 

A move to buy Chinese help on North Korea

Nordkorea Raketentest
North Korea has recently launched a series of missiles, including one just prior to the US-China meeting in FloridaImage: Getty Images/AFP/J. Yeon-Je

In his interview, Trump asserted that his softened tone on trade relations was part of a move to prevent jeopardizing talks with Beijing aimed at addressing the threat from North Korea. He also indicated that further trade concessions could be used to leverage even more cooperation against Pyongyang.

Read more: China is against US provoking North Korea

"The way you're going to make a good trade deal is to help us with North Korea; otherwise we're just going to go it alone. That will be all right, too. But going it alone means going it with lots of other nations,'" Trump said he told Chinese President Xi Jinping during last week's meeting at the American leader's Mar-a-Lago resort.

The two leaders had followed up their in-person meeting with a phone call on Tuesday.

The apparent trade-for-security deal is an unusual policy move for an American president, given that historically trade and currency issues are usually kept separate from issues of geopolitical security. It also indicates a warming relationship between the Chinese and American heads of state.

USA China - Xi Jinping & Donald Trump in Florida | Demonstranten pro & contra
Supporters and opponents of China line the streets during Xi's visit to the US to meet with TrumpImage: picture-alliance/Zuma Press/Palm Beach Post/L. Waters

'Chemistry' between Washington and Beijing

In a press conference alongside NATO Secretary-General Jens Stoltenberg on Wednesday, Trump rhapsodized on his "chemistry" and "bonding" with Xi and praised the Chinese leader for his help on North Korea and Syria.

Read more: Trump says NATO is "no longer obsolete"

Earlier in the day, China abstained on a UN Security Council resolution that condemned Syrian President Bashar al-Assad instead of joining Russia in vetoing the resolution as it had done in the past.

"I think it's wonderful that they abstained," Trump said.

Trump's increasingly friendly relations with China stand in sharp contrast to his deteriorating ones with Russia, which the president said had reached an "all-time low." 

cmb/rc (Reuters, AP, AFP)