No, China Didn’t Suddenly Stop Manipulating Their Currency When Trump Was Elected

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Here’s a snippet from the Economist’s interview with President Trump and Treasury Secretary Steven Mnuchin. The subject is whether China is manipulating its currency in a way that hurts the United States:

Trump: They’re actually not a currency [manipulator]. You know, since I’ve been talking about currency manipulation with respect to them and other countries, they stopped.

Mnuchin: Right, as soon as the president got elected they went the other way.

It’s tiresome to hear Trump say this, and doubly tiresome to hear Mnuchin chime in like a toady about it. Yes sir, Mr. President, they stopped as soon as they realized a real man was about to occupy the White House!

Here’s all you need to know about Chinese currency manipulation:

All the way through 2013, China’s foreign reserves increased nearly every quarter. This was because they were buying lots and lots of dollars as a way of keeping the value of the yuan low, which made Chinese exports cheaper and American imports more expensive. In mid-2014 they stopped. Since then, they’ve mostly sold their dollar holdings, to the tune of a trillion dollars over the past couple of years. During this entire time the yuan has been falling on its own, and the Chinese intervention has had the effect of propping it up to prevent it from falling even faster. This makes Chinese exports more expensive and American imports cheaper, which is exactly what we want.

As for November 2016, nothing happened. I don’t know if Trump knows this, since he seems to live in some kind of alternate reality, but Mnuchin does. So does everyone else.

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