Trade war lingers despite US Treasury report

Source:Global Times Published: 2018/10/18 21:53:41

The US Treasury Department didn't label China a currency manipulator in its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies on Wednesday. However, it put China, Germany, India, Japan, South Korea and Switzerland on its monitoring list.

People can temporarily stop worrying that the China-US trade conflict might be further escalated by the US Treasury Department. However, the report is released every half year and US President Donald Trump vowed to name China a currency manipulator on his first day in the White House after being elected.

It needs several technical indicators to label a country a currency manipulator. China didn't manipulate the renminbi exchange rate, and so it can't meet the criteria. If the US Treasury Department presses the label "currency manipulator" on China, its whole team of experts will be ashamed.

However, currency manipulation has become a Sword of Damocles for China and a major tool of the US game with China. It's more than a technical tool. It's often political.

Some Chinese believe the report indicates that the US doesn't want to escalate the trade war. Such an opinion may be too optimistic. On January 1, the US will increase tariffs from 10 percent to 25 percent on $200 billion of Chinese goods. Washington is also threatening yet more tariffs on another $267 billion of goods. There's no sign of the Trump administration halting anytime soon. China still needs to prepare for the worst.

Although the US has different opinions in its trade war strategy on China, being tough still prevails. China's long-term mission is to deal with this strategy. No matter how actively China communicates with the US, withstanding the tariff war is of overall significance. Whatever tactics the US applies, Sino-US competition will still center on whether their goals match their strengths and how strong the two's strategic wills can be.

China won't compete with the US at making a fuss. Instead China has built a strategy of minding its own business, not escalating conflicts and never making unprincipled concessions. And it is translating this into action.

Not calling China a currency manipulator does good to both sides. In recent years when the Chinese economy faced increasing downward pressure, the abnormal fall of the renminbi has been considered one of the financial risks that will result in capital flight and erode social faith. Thus China has no desire to manipulate its currency toward a steep depreciation.

The US is getting excessively petty-minded. The Trump administration declared Wednesday it was pulling out of the Universal Postal Union, which will reportedly save the country more than $100 million a year in postal services. Few countries would want to make money in a public goods industry like the postal union. Such a calculated move actually tarnishes the US national spirit. Washington should never forget what tremendous benefits it gained from the international system led by the US, ranging from the US dollar system to the internet rules. The US has to cherish the international system and refrain from squeezing others due to shortsightedness. 



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