March 4, 2021

Trump accuses China of "currency manipulation" after the fall of the yuan

The US president, Donald Trump, accused China on Monday of "currency manipulation" after the yuan broke the level of seven units for every dollar, something that had not happened since 2008, and urged the Federal Reserve (Fed) to take action about it.

"China dropped the price of its currency to a record low. It's called 'currency manipulation.' Are you listening, Federal Reserve (Fed)?" Trump said in a series of messages on Twitter.

The president criticized that China has manipulated its currency "forever" to rob US companies and factories, depress workers' wages and damage agricultural prices.

"No more," he remarked.

Trump has criticized the Fed for not supporting the dynamism of the country's economy with interest rate cuts and described the one announced by the US central bank last week as insufficient.

The Chinese currency, the yuan, broke on Monday the psychological barrier of the seven units for every dollar, something that had not happened since April 2008.

A spokesman for the PC Bank said on the website of the agency that depreciation of the yuan is given by "unilateral measures and trade protectionism", as well as "the imposition of tariff increases against China", in clear reference to the last turn of the trade war that China and the US maintained since March 2018.

The fall of the yuan comes after last Thursday, Trump said he would impose 10% tariffs on Chinese products valued at $ 300 billion as of September 1 in the absence of progress in trade negotiations.

Soon after, the Chinese Ministry of Commerce responded by announcing that it would take "countermeasures."

A weaker yuan means that Chinese dollar-denominated products are cheaper, something that would help curb the negative effect of the new US tariffs on their competitiveness, although the price to be paid will be an increase in the cost of imports.

This new escalation in the commercial war between China and the US caused significant declines in international financial markets.

Wall Street expanded losses this Monday to mid-session and Dow Jones of Industrials, its main indicator, fell more than 750 points.

. (tagsToTranslate) Trump (t) accuses (t) China (t) currency manipulation (t)

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