President Donald Trump has accused China and Europe of playing a “big currency manipulation game,” urging the United States to match the effort.
The president’s critics said the advice directly contradicts official American policy not to manipulate the dollar’s value to gain trade advantages.
Taking to his verified Twitter handle @realDonaldTrump on Wednesday, Trump asserted, “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games – as they have for many years!”
Specialist in International Trade and Finance, Jonathan E. Sanford, says “currency manipulator” is a term used to indicate countries that manipulate the rate of exchange for purposes of preventing effective balance of payments adjustment or gaining unfair competitive advantage in international trade.
“It is also applied to countries that intervene in their own foreign exchange markets,” he adds.
An Online think-thank, the Congressional Research, notes that the International Monetary Fund and the World Trade Organisation approach the issue of currency manipulation differently.
“The IMF Articles of Agreement prohibit countries from manipulating their currency for the purpose of gaining unfair trade advantage, but the IMF cannot force a country to change its exchange rate policies,” the research site says.
It adds that the WTO has rules against subsidies, but these are very narrow and specific and do not seem to encompass currency manipulation.
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