President Donald Trump would win congressional support if he declared China a currency manipulator as pledged during his election campaign, according to two members of the Senate Foreign Relations Committee.
Senator Lindsey Graham of South Carolina, a Republican, said on a panel at the Munich Security Conference yesterday that Congress has an opportunity to unite around action against China.
“There’s bipartisan support to declare China a currency manipulator,” said Graham, whose stance was backed by Jeanne Shaheen, a Democrat from New Hampshire. “I don’t want a war with China; I want a better relationship. But what they’re doing needs to be pushed back against – and I think currency manipulation will be an issue that may unite the Congress.”
While the U.S. has long accused China of undervaluing its currency to aid exports, Chinese authorities have actually been burning through foreign reserves to support the yuan amid an economic slowdown and capital outflows. The yuan gained 0.9 percent against the dollar in January, its steepest advance since March, after sinking 13 percent in the three years through 2016.
Trump, who pilloried China on the campaign trail for alleged unfair trade practices, vowed to declare the country a currency manipulator on his first day in office, a pledge yet to be fulfilled. Trump this month backed off another threat, committing the U.S. to the ‘One China’ policy that’s underpinned U.S. relations since the 1970s.
“I’m not clear yet what the policy is of this administration on China,” Shaheen said. “I think a One China policy is very important. I agree that it’s a currency manipulator and I think there’s probably bipartisan agreement in Congress on that.” Patrick Donahue, Bloomberg