The US Treasury Department declared Monday it had determined for the 1st time since Y 1994 that Beijing was manipulating its RMB Yuan.
Then early Tuesday, President Trump dismissed fears of a protracted trade dispute with China, ignoring a bluster warning in the Beijing press that labeling it a currency manipulator would have severe consequences for the global financial order.
President Trump announced last week he would place a 10% tariff on a further $300-B in Chinese imports starting on 1 September Tweeted that “massive amounts of money from China and other parts of the world” are pouring into the US economy.
He pledged to stand with American farmers in the face of Chinese retaliation. China has halted direct US agricultural purchases and raised the possibility of additional tariffs on US farm products.
While President Trump played down the prospect that the trade dispute could be drawn out, St. Louis Federal Reserve Bank President James Bullard said the US central bank could be stuck with a volatile global trade environment for years.
“I think of trade regime uncertainty as simply being high in the current environment,” Mr. Bullard said at a National Economists Club luncheon. “I do not expect this uncertainty to dissipate in the Quarters and Years ahead.”