United States Treasury Designates China as a Currency Manipulator
The United States Department of the Treasury has designated China as a currency manipulator. Countries are designated as a currency manipulator when they “manipulate the rate of exchange between their currency and the United States dollar for purposes of… gaining unfair competitive advantage in international trade.” The designation is in response to the Yuan dropping over 1.5% relative to the U.S. dollar this morning, reaching the lowest level since the 2008 economic crash; the S&P500 subsequently fell 3% on the day. China’s Yuan devaluation comes after last Friday when President Trump announced a new round of tariffs of “10%” on approximately “$350 billion” of Chinese exports, the latest in the ongoing trade war. President Trump commented how “China is devaluing their currency and they’re also pouring money in,… [a]nd that will totally pay for the tariffs.” He says the “tariffs are not being paid for by our people; [but are] being paid for by China.” DOW futures are currently down 1.6% on news of this designation, implying a drop of 420 points at tomorrow’s market open.