Now what? Is there a legal designation or meaning to currency-manipulator I'm unaware of, or is this basically like the Chinese designating Trump a "name-caller."
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U.S. Designates China as Currency Manipulator
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Re: U.S. Designates China as Currency Manipulator
#32I have no idea what all this means so tried to read https://en.wikipedia.org/wiki/Currency_manipulator.
Found it interesting that "Switzerland have been manipulating their currency more than China since 2009 and Germany and South Korea since 2014"
Still it is not clear what that means in terms next steps. Will there be more tariff increases or sanctions? And then China will devalue their currency even more. So where does it end?
This is US Treasury report from 2017 I started looking through: https://www.treasury.gov/resource-center/international/excha...
The last paragraph explained the logic a bit more:
> The United States cannot and will not bear the burden of an international trading system that unfairly disadvantages our exports and unfairly advantages the exports of our trading partners through artificially distorted exchange rates. Treasury is committed to aggressively and vigilantly monitoring and combatting unfair currency practices.
Granted it's published by US Treasury. I imagine the Chinese government sees the picture very much differently.
Re: U.S. Designates China as Currency Manipulator
#33Isn't Chinese Yuan depreciation caused by Trump's relentless tariff, just like Mexican Peso's depreciation when Trump threatened tariff early this year? I'm confused who is manipulating the market & currency.
No. It's caused by China's central bank printing currency in response to tariffs, essentially using currency as a weapon.
It’s caused by the Chinese not having enough dollars to prop up the yuan. There is no evidence that they are running the printing presses.
Re: U.S. Designates China as Currency Manipulator
#34Earlier quoted context omitted.
If the RMB was left to find a market value, it would fall way below 7 to probably 7.5 or even 8 something. Yes, it is being manipulated, but in the other way that Trump says it is. The Chinese are simply running out of the dollars needed to keep manipulating it so that it stays stronger than 7! The simple irony is that if the Chinese were just to give up manipulating the RMB all together, Trump would be even more ang…
There is a certain criteria, and neither Swiss, Koreans, or Japanese meet that criteria.
Yes, but the “criteria” are vague and arbitrary, so there might as well be none at all. This is purely a political decision, not an empirical one.
Re: U.S. Designates China as Currency Manipulator
#35China can outlast the US on this one. Next up, let's crash the price of oil and flip off the Iran sanctions: https://www.cnbc.com/2019/08/05/brent-and-wti-price-could-cr...
Would be funny to see Iran get really snug with China like Pakistan has... I don't think Iran would mind at all and neither would China... and would pretty much destroy the US's control over Iran's economy.
Re: U.S. Designates China as Currency Manipulator
#36Stock futures down another 2%. Amazing how much money one can lose in a matter of days. Stomach churning.
Not even days. I lost $24k today, and $60k since last week.
The thing that keeps you calm though is that sometimes it’s amazing how much money you can actually make in a matter of days, or a single day.
Re: U.S. Designates China as Currency Manipulator
#37Isn't Chinese Yuan depreciation caused by Trump's relentless tariff, just like Mexican Peso's depreciation when Trump threatened tariff early this year? I'm confused who is manipulating the market & currency.
No. It's caused by China's central bank printing currency in response to tariffs, essentially using currency as a weapon.
OK. tariffs => printing money, so tariff is the root cause, no?
Re: U.S. Designates China as Currency Manipulator
#38It ends with China being cut off from SWIFT and correspondent banking.
That would probably make them re-think their approach to economic warfare.
Re: U.S. Designates China as Currency Manipulator
#39China can outlast the US on this one. Next up, let's crash the price of oil and flip off the Iran sanctions: https://www.cnbc.com/2019/08/05/brent-and-wti-price-could-cr...
The entire European Union along with China ignoring US sanctions will make the US re-evaluate its hegemonic ideology and interests To get to a more collaborative world, this would have to happen. The risk being that it could lead to a less collaborative world if the US is seen as a toothless world police. With the EU coming into its own and willing to take a near term economic hit to advance its goals, and China bein…
With the EU coming into its own
In what possible world is the EU 'coming into its own'? It's losing its second largest contributor and still relies on the US to defend its eastern states from Russia.
EDIT: to be clear I would love for the EU to provide a credible deterrence, its in the interest of global stability and peace. But the fact remains it can't.
Re: U.S. Designates China as Currency Manipulator
#40China can outlast the US on this one. Next up, let's crash the price of oil and flip off the Iran sanctions: https://www.cnbc.com/2019/08/05/brent-and-wti-price-could-cr...
I think the trade balance is too skewed in favor of the US. It will be painful for both sides, but we have a lot more goods we can tariff than they can. Of course, they could also dump their US treasuries, but it would be a pyrrhic victory for China. They would hurt themselves too much in the process.
The US Fed would simply buy the dumped treasuries as an emergency measure.
The Fed already owns twice as many treasuries as does China, so it could also just pause the balance sheet reduction program.
It wouldn't dramatically hurt the US long term.