WASHINGTON — A top outside adviser to President Trump said the United States probably won’t name China a currency manipulator in a report due this month, a move that would break a key campaign promise and another shift from the administration’s tough trade talk.
“I would doubt that would happen,’’ Stephen Schwarzman, chairman of Blackstone Group, told Bloomberg Television when asked about how China would be designated in the Treasury Department’s first currency report under Trump. Schwarzman chairs the president’s strategy and policy forum, a panel of business leaders that includes JPMorgan Chase chief executive Jamie Dimon.
The Treasury is expected to release its report this month. It is required to report to Congress twice a year on whether America’s major trading partners are gaming their currencies.
The last report, in October, included China and five other nations on a watch list of countries at risk of engaging in unfair foreign-exchange practices, but it didn’t name any country a manipulator — a step the United States hasn’t taken since 1994.
Sparing China from being labeled a currency manipulator would be the latest indication that Trump’s rhetoric on trade as the Republican candidate last year was harsher than the policies he’s establishing as president. The administration has yet to launch renegotiation of the North American Free Trade Agreement, another step Trump promised during the campaign. Nor has the country imposed punitive tariffs on foreign countries or US companies that move jobs offshore.
Trump accused China during the election campaign of manipulating its currency to gain the upper hand in trade. But he didn’t didn’t mention the issue publicly during Chinese President Xi Jinping’s visit to Florida this month.
After the meeting, the White House announced a 100-day plan to discuss re-balancing the bilateral trade relationship.
Schwarzman chaired the second meeting of Trump’s advisory panel on Tuesday at the White House. Schwarzman said China didn’t come up Tuesday in a meeting with the president and five Cabinet secretaries.
The Treasury created a new monitoring list in April after Congress passed a law requiring closer scrutiny of foreign-exchange regimes. Treasury officials developed three criteria to decide if countries are being unfair: an economy having a trade surplus with the United States above $20 billion; having a current-account surplus amounting to more than 3 percent of its gross domestic product; repeatedly depreciating its currency by buying foreign assets equivalent to 2 percent of output over the year.
Meeting all three would trigger action by the president to enter discussions with the country and seek potential penalties.
In the October report, the Treasury noted that China has actually been intervening in exchange markets to prop up the yuan. “If you just let the Treasury guys do their jobs, it’s unlikely’’ the United States will name China a manipulator, said Douglas Holtz-Eakin, former chief economist to George W. Bush’s Council of Economic Advisers.
