U.S. President Donald Trump said on Wednesday that his administration will not label China a currency manipulator, backing away from a vocal campaign promise, even as he said the dollar was “getting too strong” and would eventually hurt the U.S. economy.
In an interview with The Wall Street Journal, Trump also said he would like to see U.S. interest rates stay low.
“They’re not currency manipulators,” Trump told the Journal about China. The statement is a stark about-face from Trump’s campaign promises to slap that label on Beijing on the first day of his administration as part of his plan to reduce Chinese imports into the United States.
The U.S. Treasury is due to file its semi-annual report on currency practices of major trading partners at the end of this week. Experts told Reuters last week that the report would not likely use the manipulator label on China.
The Wall Street Journal paraphrased Trump as saying that the reason he changed his mind on the currency issue was because China has not been manipulating its yuan for months and because taking the step now could jeopardize his talks with Beijing on confronting the threat from Democratic People’s Republic of Korea.
A U.S. Treasury spokesman could not immediately be reached for comment on Trump’s comments and on the currency report.
The United States last branded China a currency manipulator in 1994.
Trump also told the Journal that he respected Federal Reserve Chair Janet Yellen and said she was “not toast” when her current term ends in 2018. This also marks a turnaround from his frequent criticism of Yellen during his campaign, when he said she was keeping interest rates too low. At other times, however, Trump had said that low rates were good because higher rates would strengthen the dollar and hurt American exports and manufacturers.
“I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting – that will hurt ultimately,” Trump said on Wednesday.
“It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency,” Trump told the Journal.
Story by Reuters.