WASHINGTON (AP) - The Trump administration declined Friday to label China a currency manipulator despite President Donald Trump's insistent pledge during the election campaign that he would do so as soon as he took office.
The White House has said U.S and Chinese officials are still at the early stages of "fleshing out" a pledge by Trump and Xi to develop the 100-day plan to reduce the USA trade deficit with China, which a year ago reached $347 billion.
Later in the week, the US Treasury Department did not label China a currency manipulator in its semi-annual report on global currency practices.
The Treasury did not alter its three major thresholds for identifying currency manipulation put in place previous year by the Obama administration: a bilateral trade surplus with the United States of $20 billion or more; a global current account surplus of more than 3 percent of gross domestic product, and persistent foreign exchange purchases equal to 2 percent of GDP over 12 months.
Taiwan, South Korea and Japan were told in the report to keep currency market interventions as limited as possible while moving toward more flexible and transparent exchange rate policies, reports said.
"Treasury estimates that during 2016 Korea was a net seller of foreign exchange of about $6.6 billion (0.5 percent of GDP)".
"I think our dollar is getting too strong and partially that's my fault because people have confidence in me", he said.
Lew said that China will benefit from increased USA investment in service sectors such as finance and insurance, while the United States could benefit from foreign direct investment from China, which helps create jobs.
While Trump and Chinese President Xi Jinping last week agreed to 100-day trade talks, USA business leaders in China have expressed concern about a lack of progress in gaining further access to the Chinese market despite years of negotiations. Washington has not branded any country a currency manipulator since 1994.
Previous administrations have used three factors to determine if a country is a currency manipulator - a trade surplus with the US of more than $20 billion; a current-account surplus totaling more than 3% of its gross domestic product; and repeatedly devaluing its currency by buying foreign assets that equals to 2% of output a year. "China steals our intellectual property, doesn't let American companies compete in China, and has manipulated their currency causing the loss of millions of jobs", said Senate Minority Leader Charles E Schumer.
Speaking with the Journal, Trump said he changed his mind because China hadn't been manipulating its currency for months, and that such a move could harm ongoing talks with Beijing on containing the nuclear threat from North Korea.
Treasury said it will be scrutinising China's trade and currency practices very closely, especially in light of the extremely sizable bilateral trade surplus that China has with the United States. "We are pleased to hear the issue has been elevated to the highest levels of both governments and that there is commitment to resolve the U.S. beef access issue in an expedited fashion", CEO of the U.S. Meat Export Federation Philip Seng said.
China does not fully meet the department's definition of a currency manipulator because it has recently been buying yuan to prevent a sudden drop in the Chinese currency, instead of steering it lower.