The Trump administration is dropping its designation of China as a currency manipulator ahead of the expected signing of a trade agreement between the world’s two largest economies later this week. The move was announced Monday, five months after the designation was applied.
The Phase 1 trade deal that President Trump is expected to sign Wednesday with China includes commitments China will make regarding preserving the integrity of its currency.
“China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability,” said Secretary of the Treasury Steven Mnuchin in a statement.
China will, however, remain on a list of countries whose currency practices the U.S. closely monitors, a list that also includes Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland, and Vietnam.
Trump has frequently criticized China for devaluing its currency to gain an edge in international trade, accusing Beijing of committing one of the “greatest thefts in the history of the world.”
The administration hopes the preliminary trade agreement will be the beginning of the end to the trade battles that have roiled the relationship of the two countries and the global economy in recent years.
China agreed in August to restart trade talks with the Trump administration, prompting the U.S. to agree to delay additional tariffs on hundreds of billions of dollars worth of Chinese products. The U.S. currently has heavy tariffs on $250 billion worth of Chinese imports, while China has tariffs on $60 billion worth of U.S. products.