US President Donald Trump promised to label China a currency manipulator on his first day in office, but after 77 days, his administration is touting a new term: “Currency misalignment.”
An administration official told reporters on Thursday that the administration views “misalignment” as more significant than “currency manipulation” as a cause of trade deficits, signaling another step away from a manipulator designation against China next week.
“The term currency manipulation doesn’t fully encompass the currency movements that concern us,” the official said, speaking on condition of anonymity because he was not authorized to speak to the media.
The official’s comments came as Trump prepared for his first face-to-face meeting with Chinese President Xi Jinping (習近平) in Florida, a summit fraught with trade tensions between the world’s two largest economies.
Several foreign exchange policy experts have told reporters that US Secretary of the Treasury Steven Mnuchin looked unlikely to label China a currency manipulator in a semi-annual currency report due on Friday next week.
China meets only one of three thresholds needed for that determination — its high trade surplus with the US.
The experts said major changes to the thresholds would be needed to label China a manipulator when it is intervening in currency markets to prop up the yuan instead of pushing it down and its global current account surplus shrank to 1.8 percent last year, well below the current 3 percent threshold.
Such changes would also likely ensnare Taiwan, South Korea and other nations in manipulator designations.
The official’s comments suggest Trump’s administration plans to put more emphasis on a 90-day study of trade abuses, including currency misalignments, than on the currency report.
In unveiling the study last week, US Secretary of Commerce Wilbur Ross said misalignment can occur when a currency moves outside its normal range, which could occur because of manipulation or because of other, unintentional factors.
He cited the Mexican peso’s sharp fall in response to Trump’s election last year as an example of a misaligned currency.
The peso fell nearly 17 percent against the US dollar after the election, but has recovered most of that loss.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
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