Monday President Donald Trump accused Russia and China of devaluing their currencies while the United States raises interest rates.
In a Twitter post, Trump said that Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!
Trump’s tweet referred to what he sees as unfair trading advantages: if a country’s currency is artificially low, its exports are more competitive. Higher U.S. interest rates would generally increase the value of the dollar, making U.S. exports more expensive.
Ever since Trump took office in 2017, our dollar has weakened substantially against most currencies, including the Chinese yuan and, until the U.S. imposed sanctions on Russia in the last few weeks, the ruble.
And against the yuan, the dollar has fallen by 8.6% since January 20, 2017, while it appreciated by 4.5% against the ruble. Until the U.S. announced sanctions on Russian oligarchs earlier this month, however, the dollar had weakened by nearly 4% against the Russian currency. That gain was entirely erased by a two-day drop of 8.4% in the ruble on April 9 and 10.
Even more so, the U.S. dollar index, which measures the greenback’s value against a basket of major trading partner currencies, has declined by 11.2% since Trump became president. The U.S. Treasury, in a semi-annual report on Friday, again refrained from naming any major trading partners as currency manipulators. The report came as the Trump administration pursues potential tariffs, negotiations and other restrictions to try to cut a massive trade deficit with China.
But the report didn’t say anything about Trump’s recent threats to impose billions of dollars worth of tariffs on Chinese goods over Beijing’s intellectual property practices, or pending Treasury restrictions on Chinese investment in the United States.