U.S. President Donald Trump holds a news conference with NATO Secretary General Jens Stoltenberg in the East Room of the White House April 12, 2017 in Washington, D.C. (Photo : Getty Images)
U.S. President Donald Trump on Wednesday said his administration will no longer label China as a currency manipulator, backing away from one of his key campaign pledges even as he said the U.S. dollar was "getting too strong" and will eventually hurt the economy.
"They (China) are not currency manipulators," Trump said in an interview with The Wall Street Journal, adding that taking such steps now could jeopardize his talks with Beijing in dealing with North Korea.
A U.S. Treasury spokesman confirmed on Wednesday that the Treasury Department's will not name China as a currency manipulator in its semi-annual report on currency practices of major trading partners due later this week.
Trump has previously been vocal in accusing China of manipulating its currency to gain from exports during his campaign, although many economists have argued that the yuan has been at equilibrium level in recent years.
The International Monetary Fund declared the yuan as no longer undervalued in 2015.
In the interview, Trump also expressed his desire see U.S. interest rates remain low, another comment at odds with what he had often said during the election campaign.
The U.S. dollar fell broadly in response to Trump's comments on the strong dollar and interest rates, while U.S. Treasury yields fell and Wall Street stocks slipped.
The comments also broke with a longstanding practice of both Democratic and Republican administrations of refraining from commenting on policy set by the independent Federal Reserve. It is also highly unusual for a U.S. president to address the dollar's value, which is a subject usually left to the Treasury Secretary, according to Reuters.
Separately on Wednesday, at a joint news conference with NATO Secretary Jens Stoltenberg, Trump said the U.S. is prepared to tackle the crisis surrounding North Korea with or without the assistance of China.
China was last branded as a currency manipulator in 1994 by the U.S. Under U.S. law, labeling a country as a currency manipulator can lead to an investigation and negotiations on tariffs and trade.
U.S. Senate Democratic leader Chuck Schumer described Trump's decision to break his campaign promise on China as "symptomatic of a lack of real, tough action on trade" against Beijing.
"The best way to get China to cooperate with North Korea is to be tough on them with trade, which is the number one thing China's government cares about," Schumer said in a statement.
