US Decision to Designate China as Currency Manipulator May Decrease Chances of Trade Deal, CRS Says
The recent U.S. decision to designate China as a currency manipulator is said by some analysis to have decreased the chances of a trade deal and increased the likelihood of escalation that could have major economic consequences, according to an…
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Aug. 9 report by the Congressional Research Service. “Many analysts have argued that the currency manipulation designation has complicated negotiations and reduced the likelihood of an agreement in the short-term,” the CRS said, “and in turn have argued that the escalation could begin having significant economic repercussions.” The report also noted skepticism among some analysts that China is trying to unfairly manipulate its currency, saying “many analysts” have argued that China’s decision to allow the yuan to depreciate “is not clearly an effort to gain an ‘unfair’ trade advantage.” The report pointed to one analyst who said there will be no “practical consequences” to the designation, which has been called a “political exercise” by other analysts.