Trump Seen Having Support If He Dubs China Yuan Manipulator

Updated on
  • Graham, Shaheen cite bipartisan backing for declaration on FX
  • President’s policy toward China not yet clear, Shaheen says

What Trump's Trade War with China Would Look Like

President Donald Trump would have the support of Congress if he declared China a currency manipulator, as he pledged during the election campaign, according to two members of the Senate Foreign Relations Committee.

Senator Lindsey Graham of South Carolina, a Republican, said on a panel at the Munich Security Conference on Sunday that the Republican-led Congress has an opportunity to unite around action against China.

Lindsey Graham

Photographer: J. Scott Applewhite/AP Photo

“There’s bipartisan support to declare China a currency manipulator,” said Graham, whose stance was backed by Jeanne Shaheen, a Democrat from New Hampshire. “I don’t want a war with China; I want a better relationship. But what they’re doing needs to be pushed back against -- and I think currency manipulation will be an issue that may unite the Congress.”

While the U.S. has long accused China of undervaluing its currency to boost exports, Beijing has actually been burning through foreign reserves to support the yuan amid an economic slowdown and capital outflows. The yuan gained 0.9 percent against the dollar in January, its steepest advance since March, after sinking 13 percent in the three years through 2016. The currency was little changed on Monday at 6.8671 per dollar.

Trump, who pilloried China on the campaign trail for its trade practices, has the power to brand the country a currency manipulator and doesn’t need Congressional support.

In spite of vowing throughout the campaign that he would do that on his first day in office, Trump has yet to act one month into his presidency.

Steven Mnuchin, who was sworn in on Feb. 13 as Treasury secretary and would play a key role in any decision about China’s foreign-exchange policies, said during his Senate confirmation process that he’s willing to label the country a manipulator if warranted.

Trump this month also recommitted the U.S. to the “One China” policy that’s underpinned U.S. relations since the 1970s, backing off a threat made before his inauguration in January to abandon a stance that acknowledges that China and Taiwan are part of the same country.

A QuickTake explainer on China’s currency

“I’m not clear yet what the policy is of this administration on China,” Shaheen said. “I think a One China policy is very important. I agree that it’s a currency manipulator and I think there’s probably bipartisan agreement in Congress on that.”

The U.S. last singled out China for unduly influencing its currency in 1994, when Democrat Bill Clinton was president. Successive U.S. leaders since then -- both Democrat and Republican -- have refrained for taking such a step, in spite of sporadic pressure from lawmakers to do so.

— With assistance by Rich Miller

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