President Donald Trump accused China on Monday of manipulating its currency as the trade war between the world’s largest economies keeps escalating.
“China dropped the price of their currency to an almost a historic low,” Trump said in a tweet. “It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”
China — which has historically controlled its currency — allowed the yuan to fall to its lowest level in more than a decade. The yuan traded above 7 per U.S. dollar, making Chinese products cheaper.
The People’s Bank of China denied devaluing the yuan as a counter to U.S. tariffs. In a statement, PBOC Governor Yi Gang said China will “not engage in competitive devaluation, and not use the exchange rate for competitive purposes and not use the exchange rate as a tool to deal with external disturbances such as trade disputes.”
Trump’s comments on Monday came less than three months after his administration decided not to label China a currency manipulator. No country has been named a manipulator since the Clinton administration did so for China in 1994.
Though Trump vowed to brand China a manipulator during his campaign, his administration has passed on five opportunities to do so.
Trump’s tweet came four days after he announced a 10% tariff on the remaining $300 billion in Chinese imports that had eluded U.S. levies. The additional tariff is set to take effect on Sept. 1, when Chinese officials are scheduled to meet with their U.S. counterparts in Washington.
Trump said last week that China was supposed to buy “large quantities” of U.S. agricultural products, but did not do so. China had reportedly denied Trump’s claims, but Bloomberg News reported Sunday night the Chinese government asked state-owned companies to halt imports of U.S. agricultural products.
—CNBC’s Tom Franck contributed to this report.