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U.S. Designates China as Currency Manipulator

wsj.com

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Re: U.S. Designates China as Currency Manipulator

#81

Post by wahern »

internet_user wrote: post #74
simonh wrote: post #66

Earlier quoted context omitted.

That would also do crippling damage to US and other foreign companies doing business with China. Even the current tariffs and counter-tariffs have cost US companies many billions. Qualcomm alone is estimated to have lost about a billion dollars in sales.

Boohoo, poor corps. Should we sell ourselves out entirely to China to satisfy the corporate profit motive? Personally, I rather Qualcomm goes bankrupt entirely than see Chinese global hegemony.

Abusing our current structural position in the international monetary system is the surest way to hasten the end of our own hegemony and the beginning of Chinese hegemony--if that ever comes.

Re: U.S. Designates China as Currency Manipulator

#82

Post by simonh »

aianus wrote: post #61
datumy wrote: post #37

Earlier quoted context omitted.

OK. tariffs => printing money, so tariff is the root cause, no?

There are plenty of good reasons why China deserves tariffs, why not start there as the root cause? Protectionism, IP theft, banning or heavily restricting US tech firms from operating in (aka exporting to) China, the list goes on.

And if that was the real reason, you’d expect the US to be coordinating with other countries that have the same beef with China. Instead, the US is antagonising them as well.

Trump has been very clear the tariffs are mainly about boosting US manufacturing. It’s not going to work, but that’s what he keeps saying. If it really was about the issues you list, there are plenty of ways to address them in a much more coordinated and effective manner with like minded allies. Instead the US keeps their demands very vague and keeps changing the criteria, to avoid the chance of an actual agreement.

Contrast with the renegotiation of NAFTA. Clear, specific demands in areas they knew would be open to negotiation. In the end, fairly minor updates and a workable deal.

Re: U.S. Designates China as Currency Manipulator

#83

Post by kasey_junk »

nradov wrote: post #63

Every country would prefer to devalue their currency relative to others in order to increase their trade surplus (or cut their deficit). Mathematically they cannot all succeed, so it ends up being a slow motion race to the bottom.

But in this case China had been artificially propping up their currency against the dollar. What caused this manipulation was them stopping that.

Re: U.S. Designates China as Currency Manipulator

#84

Post by resters »

devoply wrote: post #6
kasey_junk wrote: post #5

The best part of this is that they are being called a manipulator for not shoring up their currency artificially.

[flagged]

Comments critical of Trump are getting downvoted and the users throttled. Not sure what is going on.

Re: U.S. Designates China as Currency Manipulator

#85

Post by opportune »

I'm not an economist, but my impression is that if the Chinese currency is allowed to float, the major effect is that they would begin to import more goods from abroad and that their exports would be less competitive. But what would China import that they are not already importing?

Personally I would rather see the rules about local ownership of businesses open up so that foreign people can actually freely do business in China. Now that China is not a super poor country anymore, it seems fair. And this way they can keep their currency devalued as there is still a way for trading partners to use it to their advantage, while the majority of the advantage remains with China

Re: U.S. Designates China as Currency Manipulator

#86

Post by drawkbox »

As the reserve currency, the USD has some weight on it due to that position, can't just manipulate it like others can as easily except printing more [1].

Being the reserve currency, it was more fair when everyone was pegged to the dollar so at least manipulation was in check a bit. Both the unpegging and the free trade agreements put more pressure on the US for being a reserve currency.

Ultimately, the USD is too high and it is the root of lots of the problems with jobs, exports/imports and the trade imbalance, national debt as the reserve currency is a safer investment due to it not being as easy to manipulate due to the sheer size of the supply. Now that we are a debtor nation rather than a creditor nation, the problems are more evident [1].

[1] https://www.forbes.com/sites/bobmcteer/2013/09/05/reserve-cu...

Re: U.S. Designates China as Currency Manipulator

#87

Post by internet_user »

havetocharge wrote: post #78
rossdavidh wrote: post #67

So, really, is there any doubt that this is true? China's currency exchange rate has been abnormally stable for a long time, and the Obama, Bush, Clinton, Bush, and Reagan administrations all knew it was the result of currency manipuliation. They just found it politically unpalatable to admit it out loud. The real question would be, why is the U.S. finally admitting this out loud? 1) amping up a trade war 2) decoupli…

US decoupling itself from China would have an avalanche of effects, including huge inflation on most consumer goods, and outright product shortages. China is also a huge foreign debt holder, and if presumably no longer a buyer due to decoupling, will send US interest rates skyrocketing.

The fed has unlimited control over the rates. They could literally just buy out every bond in existence.

Re: U.S. Designates China as Currency Manipulator

#88

Post by gopher2 »

internet_user wrote: post #19
gopher2 wrote: post #9

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."

"The three assessment criteria are: “(1) a significant bilateral trade surplus with the United States is one that is at least $20 billion; (2) a material current account surplus is one that is at least 3 percent of gross domestic product (GDP); and (3) persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly and total at least 2 percent of an economy’s GDP over a 12-mo…

Thanks. TIL this is a real thing. Let the bilateral negotiations begin!

Re: U.S. Designates China as Currency Manipulator

#89

Post by codingslave »

The long story to this is that the Chinese dont like what Trump is doing, he is the first to stand up to their tactics. The thing is, if Trump doesn't get reelected, a democratic candidate will most likely not continue the trade war. China has every incentive to place pressure on the us stock market in the hope that it ruins Trumps chances at reelection. So they play this long waiting game, in the chance that Trump doesnt get elected.

Re: U.S. Designates China as Currency Manipulator

#90

Post by landryraccoon »

internet_user wrote: post #74
simonh wrote: post #66

Earlier quoted context omitted.

That would also do crippling damage to US and other foreign companies doing business with China. Even the current tariffs and counter-tariffs have cost US companies many billions. Qualcomm alone is estimated to have lost about a billion dollars in sales.

Boohoo, poor corps. Should we sell ourselves out entirely to China to satisfy the corporate profit motive? Personally, I rather Qualcomm goes bankrupt entirely than see Chinese global hegemony.

> Chinese global hegemony.

Where on earth is this coming from? What does this even mean?

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