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The United States will remove China from a list of countries considered currency manipulators just two days before top trade negotiators for Washington and Beijing sign a key “Phase One” trade deal, a person familiar with the matter told CNBC.
The decision to strike China from the currency manipulator list comes more than five months after the Treasury Department formally made the designation. President Donald Trump and China Vice Minister Liu He are scheduled to sign a preliminary trade agreement in Washington on Wednesday.
Treasury’s move in August to call China a manipulator was the first such formal designation since President Bill Clinton’s administration and came as the Chinese yuan weakened beyond 7 yuan to the dollar for the first time since 2008. And while largely symbolic, the Treasury Department’s summertime decision to label China as a manipulator could have left Beijing open to additional scrutiny through the IMF.
China’s central bank said Monday’s depreciation was “due to the effects of unilateralist and trade-protectionist measures and the expectations for tariffs against China.” People’s Bank of China Governor Yi Gang said that China won’t engage in competitive devaluation and that the decline was due to market forces.
The White House and the Treasury Department declined to comment on this story. The S&P 500 rose to a record high following reports that the Treasury Department will no longer list China as a manipulator.
Washington’s move to striking China as a currency manipulator comes two days ahead of a hotly anticipated Phase One trade deal signing between the two nations.
Treasury Secretary Steven Mnuchin in an interview with Fox News on Sunday reiterated the importance of the pending deal and said that Beijing has agreed to purchase some $200 billion in U.S. goods over the next two years.
Bloomberg News first reported on the Treasury Department’s decision to delist China as a manipulator.
(Source CNBC)(Source Twitter Donald Trump)