Scarlet letter

13 January 2020 By Gina Chon Follow @GinaChon

The U.S. government will stop accusing Beijing of yuan manipulation as part of a limited tariff deal. The dubious claim was born of presidential ire. But its arguable success makes it a useful stick for the White House – a worry for those with growing trade deficits like Vietnam.

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The U.S. Treasury Department will cease to refer to China as a currency manipulator in its report on the foreign-exchange practices of major trading partners due out this week, Bloomberg reported on Jan. 13. Treasury added the designation in August 2019 after President Donald Trump criticized China for not fulfilling promises related to trade talks. It was the first time the U.S. government had imposed the label since 1994.

The two countries are scheduled to sign a so-called Phase One pact on Jan. 15. As part of that deal, they are expected to pledge that they will not use currency devaluation to make their exports more attractive.

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