August 5, 2019, China “currency manipulation” bad:
“Secretary Mnuchin, under the auspices of President Trump, has today determined that China is a Currency Manipulator,” the Treasury Department said in a release. “As a result of this determination, Secretary Mnuchin will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.”
“In recent days, China has taken concrete steps to devalue its currency, while maintaining substantial foreign exchange reserves despite active use of such tools in the past,” the Treasury Department added. “The context of these actions and the implausibility of China’s market stability rationale confirm that the purpose of China’s currency devaluation is to gain unfair competitive advantage in international trade.”
August 5, 2019, China “currency manipulation” good:
Based on the historic currency manipulation by China, it is now even more obvious to everyone that Americans are not paying for the Tariffs – they are being paid for compliments of China, and the U.S. is taking in tens of Billions of Dollars! China has always….
— Donald J. Trump (@realDonaldTrump) August 5, 2019
Elaboration from August 1st in Ohio:
“Don’t let them tell you, the fact is — China devalues their currency, they pour money into their system. Because of that, you’re not paying for those tariffs. China’s paying for those tariffs,” the president said, hours after announcing the new set of tariffs on Chinese goods. “Until such time as there is a deal, we will be taxing the hell out of China.”
Now isn’t that interesting. “Currency manipulation” is the process by which takes the burden of Trump’s tariffs away from Americans and onto itself, but it is also something nefarious that has to stopped. Literally at the exact same time, depending on which corner of the mouth Trump is talking from.
It is something that gives China an “unfair advantage” in trade, but it is also something that means the US is “taxing the hell out of China”. How can something be so nefarious and yet at the same time the best thing after sliced bread? Which one is it?
And what exactly is his Ohio audience supposed to think now that Trump fuming that China should not be “devaluing its currency”? That Trump wants Americans to start paying for his tariffs? That he wants to stop being able to “tax China”?
What they should come away with is the realization that Trump is wholly convinced that they are as dim as he is.
Of course if China really is devaluing its currency to subsidy foreigners’ purchasing power* when buying Chinese goods then other countries which have not imposed tariffs will also benefit. Meaning the US was likewise already benefiting from this practice before the tariffs, meaning it was absurd to start a trade over it.
The savings millions were making on buying cheaper Beijing-subsidized goods were a golden opportunity for the American economy to expand even further. That this did not happen is not the fault of the Chinese but of the “currency manipulation” at home, necessary to keep the financial sector ballooning and the government deficits funded.
Instead China was made into a scapegoat and attacked for what Trump, when it suits him, recognizes was actually a sweet situation for the Americans.
*It has done so historically but current devaluation is a consequence of real pressures on the currency.