Guwahati  
 
logo
  Guwahati,
North East »» Trinamool Congress is a 'transit camp', says Tripura CPI(M) •••ONGC doubles gas production in Tripura in 5 years •••Two tortoises rescued from Agartala market•••State »» Illegal constructions demolished at Khoirabari•••Resentment among AGP workers over candidature of Dr Ranuj Pegu•••BJSM, Mohilary slam MP Naba Sarania for his remark•••National »» Amarinder meets Modi, seeks special package for farmers •••Aadhaar forced on people: Opposition; walk out from Lok Sabha •••No one symbol to Swaraj India: Election Commission •••International »» Trump's pick for SC finds attacks on judges disheartening •••US intelligence committee is 'confused': Kremlin •••Britain orders devices ban on flights from 6 Middle East nations •••    
  Home » Editorial » Story
 
Will Donald Trump take on the Chinese yuan?

By Vatsal Srivastava

China has long been labelled a currency manipulator, having an unfair advantage in the global export arena. However, these allegations have never stopped Beijing from intervening in the currency markets at will, without taking into consideration the negative spillover effects on FX volatility and global trade.

But now it seems that US President Donald Trump is all set to unleash a new tactical strategy on China and its currency policy. There has been no official announcement on this matter out of the White House as yet, but it is extremely likely that the author of “The Art of the Deal” will start deploying his hardball approach on China soon.

The US Trade Facilitation and Trade Enforcement Act of 2015 uses three “assessment factors” for labelling a country as a currency manipulator. They are:

* It has a material bilateral trade surplus with the US, which the Treasury has currently set at a nominal value of $20 billion.

* It has a material current account (CA) surplus, which the Treasury sets at a benchmark cutoff of three per cent of the GDP.

* It engages in persistent one-sided intervention in the foreign exchange market, which the US describes as being more than two per cent of its GDP over the year.

China meets the first two conditions but due to the unreliable nature of foreign exchange data out of the country, it is hard to determine whether the third condition holds or not.  India, of course, by the virtue of its current account deficit is not on this list. It is important to note that labelling China (or any other country for that matter) as a currency manipulator doesn’t carry much teeth under law unless it can be reinterpreted as an unfair subsidy. Thus, it would be fair to assume that the US Commerce Secretary would now designate currency manipulation as an unfair subsidy.

This would potentially open doors for US imposing countervailing duties/tariffs which would then be outside of the World Trade Organisation (WTO) framework. While WTO has rules against subsidies, the rules do not encompass currency manipulation. Such a move would be a big departure from the norm and would give US additional arsenal for trade negotiation; it may also lead to an escalation of WTO dispute filings and retaliation if US follows through on this threat.

More importantly, this could influence trade and FX policy in some countries as a pre-emptive move to counteract this US policy shift. The article also says that US would no longer single out China but that its measures related to currency would apply to “other countries” as well. Japan, South Korea, Thailand and Vietnam are all at risk amongst the Asian economies.

It would be interesting to see the price action in the global currency markets and China’s response to these potential actions. One can only hope that The Donald does not ignite a global currency war. (IANS)

.
       
Maximum
 
Minimum
 
oC
oC
oC
oC
oC
oC
oC
oC
oC
oC
oC
oC
 Arunachal News
Government taking up reform measures: Khandu
Governor mourns touristís demise
Phased bandh in Arunachal
CS propagates 'Cut 1, plant 10 trees' concept
 Meghalaya News
Consultants engaged to study on MBDA, BMA
The issue of being landless in Meghalaya
House Committee completes probe
Shut-down notice issued
 Northeast News
Trinamool Congress is a 'transit camp', says Tripura CPI(M)
ONGC doubles gas production in Tripura in 5 years
Two tortoises rescued from Agartala market
Congress MLA in Manipur faces disqualification
 Cachar News
AU Students Union submits litany of allegations to VC
Friendly shooting competition to strengthen relations between BSF and BGB
'Surommya Chando Bashar' observes World Poetry Day
 National News
Amarinder meets Modi, seeks special package for farmers
Aadhaar forced on people: Opposition; walk out from Lok Sabha
No one symbol to Swaraj India: Election Commission
SC defers hearing on Babri Masjid conspiracy case
 International News
Trump's pick for SC finds attacks on judges disheartening
US intelligence committee is 'confused': Kremlin
Britain orders devices ban on flights from 6 Middle East nations
Musharraf wanted 'underhand' deal in 2007: Sharif
 State-1
Illegal constructions demolished at Khoirabari
Resentment among AGP workers over candidature of Dr Ranuj Pegu
BJSM, Mohilary slam MP Naba Sarania for his remark
Social entrepreneur Dr Achyuta Samanta urges students to pursue goals
 State-2
Two Asak (Garo) Revolutionary Army rebels nabbed
Prisoner escapes from Nagaon central jail
Six schools in Chirang functioning without teachers
Excise raids in Margherita
 Local Sports
Bud lift GSA 'A' Division Cricket title
Army Cycling Expedition begins
Boxing AGM
School Games starts
 Sports
Jadeja, Pujara, Vijay get Grade A contracts; Raina, Harbhajan miss out
I love Kohli and Australian public love him: Clarke
India made to work hard for 3-2 win against Cambodia
U-17 World Cup: FIFA urges Delhi to hasten training sites work
 Editorial
Reciprocating Dhaka on terror
From water consumers to conservers
Why India needs more male health workers
Letters to the Editor
 Op-Ed (Sunday)
In Trumpland: Tweet, tap, snoop & scoop!
Connected cars: Is India ready?
Science and Religion
 
Assam
 
Assam is a northeastern state of India with its capital at Dispur located in the city of Guwahati.
 
more...
Nagaland
 
Nagaland is a northeastern state of India with its capital at Kohima. located in the Guwahati city.
 
more...
Mizoram
 
Mizoram is a northeastern state of India with its capital at Aizwal. located in the Guwahati city.
 
more...
Meghalaya
 
Meghalaya is a northeastern state of India with its capital at Shillong. located in the Guwahati.
 
more...
Manipur
 
Manipur is a northeastern state of India with its capital at Imphal.
 
more...
Tripura
 
Tripura is a northeastern state of India with its capital at Agartala.
 
more...
Arunachal Pradesh
 
Arunachal Pradesh is a northeastern state of India with its capital at Itanagar.
 
more...
Sikkim
 
Sikkim is a northeastern state of India with its capital at Gangtok.
 
more...
Home  |  Guwahati City  |  Editorial  |  International  |  National  |  Business  |  Arunachal  |  Meghalaya   |  Northeast  |  State  |  Cachar  |  Sports   |  Local Sports
 Archive  |  Melange  |  Saturday Fare  |  Junior Sentinel  |  Multilingual  |  About Us  |  Contact Us  |  Advertise with us  |  Dongmusa