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Tuesday, February 27, 2024

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USA urges China to avoid persistent weakness of its currency

 Washington, – The US Department of the Treasury He called Tuesday on China to avoid the persistent weakness of its currency, justifying its decision to keep the Asian giant on the list of economies that deserve “attention” for their exchange practices.

In a report, entitled “Macroeconomic and foreign exchange policies of the main US trading partners,” the Treasury said it continues to have “significant concerns” about China’s monetary practices, particularly in light of “misalignment and underestimation.” of the renminbi (official name of the yuan, the Chinese national currency) with respect to the dollar.

“China should make a concerted effort to improve the transparency of its operations and exchange rate and reserve management objectives,” said the document, which devotes a section to analyze the situation with one of the country’s main trading partners.

Specifically, he explained that the Chinese currency has fallen against the dollar by 8% in the last year in a context of bilateral trade surplus “extremely large and growing”, which, according to the document, stood at 419,000 million dollars in 2018.

The Treasury Department indicated that it continues to “urge China to take the necessary measures to avoid a persistently weak currency” and noted that the Asian giant “needs to aggressively address the forces that distort the market,” among which he mentioned the subsidies.

An improvement in the “economic fundamentals and the configuration of structural policies” would support a stronger Chinese currency “and would help reduce China’s trade surplus with the United States,” the report said.

The trade deficit, which is explained in US exports to China for 120,000 million and imports from that country for 540,000 million dollars last year, has been the point of discord between Washington and Beijing since the arrival of the president, Donald Trump, to the White House.

On May 10, Trump began the process to impose tariffs in 300,000 million dollars on imports from China, which, added to current levies, covers the total value of Chinese goods imported annually by the United States.

In a statement, the representative of Foreign Trade (USTR), Robert Lighthizer, revealed then that the US It would raise the tariff rate on Chinese imports valued at 200,000 million dollars from 10% to 25%.

Beijing responded three days later with the announcement that from June 1 will impose tariffs on goods imported from the United States worth 60,000 million dollars, in a new chapter of a commercial dispute tinged by approaches at the negotiating table. )

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