China’s currency climbed against the dollar, gain surprises Trump

China Currency

The yuan gained 0.9 percent against the dollar in January, its highest advance since March, after sinking 13 percent in the three years through 2016. While Trump has criticized Asian policy makers for keeping their currencies weak to aid exports, Chinese authorities have been burning through foreign reserves to support the yuan amid an economic slowdown and capital outflows.

Donald Trump probably hasn’t followed through on campaign pledges to label China a currency manipulator because the yuan’s been stronger than he anticipated.

Tensions between the world’s two largest economies have gone higher in recent months. On the campaign trail last year, Trump blasted trade deals with China that generated U.S. deficits. After winning the presidential election, Trump abandoned almost four decades of diplomatic protocol on Dec. 2 by speaking directly with the leader of Taiwan, which Beijing considers a province. In early January, China moved to slap tariffs on an ethanol byproduct that’s fed to animals, worth about $2 billion to America’s agricultural sector.

“I think it’s been going the opposite direction than he thought it was going to be going,” Iowa Governor Terry Branstad said in an interview at an ethanol industry conference in Altoona, Iowa. “Obviously, there’s always going to be some issues with regard to currency. There are a lot of issues there.”

Last week, Trump signed an executive order to withdraw the U.S. as a signatory to the Trans-Pacific Partnership accord with 11 other nations. According to Branstad, those types of pacts are likely to be replaced with bilateral trade agreements between America and other countries.

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