Trump joins lawmakers in denouncing China currency move
Washington — Billioanire Donald Trump is joining forces with Michigan lawmakers in sounding the alarm about China’s decision to devalue its currency, a move that could make it harder for companies in the state to compete.
It also puts a new spotlight on currency moves by countries, an issue that has been at the center of the Trans-Pacific Partnership trade talks. China’s decision to weaken its currency makes Chinese exports to the United States cheaper — and U.S. exports more expensive in dollar terms. It may also prompt the Federal Reserve to delay its decision to raise interest rates which is widely seen as happening in September. .
China’s yuan fell another 1.6 percent against the U.S. dollar Wednesday, following Tuesday’s 1.9 percent slide. It is fueling concern about a possible currency war if other governments fight back with their own devaluations to compete in export markets.
In a Detroit News interview Wednesday, GOP presidential candidate Trump said he would consider imposing punitive tariffs on China if it didn’t stop reducing the value of its currency: “It’s impossible for our companies to compete. We have a lot of power over China, because if we have to, we’ll put on tariffs.”\
Trump said he supports U.S. automakers who have called for making currency manipulation a central part of trade talks. “You can’t have trade deals unless you talk about currency devaluation,” Trump said.
He suggested China was emboldened to act because President Barack Obama is focused on an Iranian nuclear deal.
Trump also criticized the U.S. Treasury for not doing more on currency moves by China. “They don’t know what they are doing,” Trump said.
U.S. Rep. Debbie Dingell, D-Dearborn, praised Trump’s frank comments on currency.
“While Mr. Trump and I don’t agree on many issues, his comments in Birch Run, Michigan, regarding China’s currency devaluation were spot on. Countries like China that cheat and don’t play by the rules hurt good-paying American jobs — like the ones we have right here in Michigan in the auto industry, and it needs to stop,” she said.
She called it an issue where both parties can work together.
“While the long-term impact of the policy change is not yet clear, there is no question that American workers deserve to be able to compete on a level global playing field. For that reason, we must enact strong, enforceable protections against currency manipulation so we can protect American workers if our trading partners engage in unfair practices,” Dingell said.
Earlier this week, Rep. Sander Levin, D-Royal Oak, criticized China’s decision — before Trump’s comments.
“Given China’s history of devaluing its currency to gain an unfair export advantage, today’s actions by the Chinese government raise serious concerns,” he said. “There is reason to be skeptical of believing that the largest devaluation of the Chinese currency in over two decades is merely about moving to a market-based exchange rate.”