The Treasury Department on Monday removed China from a list of countries the U.S. regards as currency manipulators as the two economic powerhouses edged towards ending a damaging trade war.
In its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, the Treasury concluded that “no major U.S. trading partner” could be considered a currency manipulator at this time.
The decision came as trade negotiators for the U.S. and China are set to meet Wednesday to sign a “phase one” deal in Washington aimed at ending a trade war that saw the world’s two largest economies slap tariffs on a range of products.
In a statement, Treasury Secretary Steven Mnuchin said Beijing had taken steps to stop artificially devaluing its currency, the yuan, which had made its exports cheaper and thus hurt rival manufacturers.
“The Treasury Department has helped secure a significant Phase One agreement with China that will lead to greater economic growth and opportunity for American workers and businesses,” said Mnuchin.
“China has made enforceable commitments to refrain from competitive devaluation while promoting transparency and accountability.”
Instead of being treated as a currency manipulator, China is now on a “monitoring list” of U.S. trade partners that “merit close attention”. The list includes Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland and Vietnam.