On Monday, August 5, the Treasury Department officially labeled China a currency manipulator. Though frequently threatened in political election cycles, this is the first time the designation has been imposed since China, South Korea, and Taiwan were cited in 1994 by the Clinton administration. The designation is mostly symbolic, as many of the actions taken by the Trump administration to date, such as implementation of tariffs, go beyond the remediation actions enumerated in US law.
China Market Intelligence
Presidents Trump and Xi will meet on the sidelines of the G20 Summit near the end of June, with preparatory talks starting this week. It is unlikely that a final trade deal will be reached at the meeting. Before the presidential meeting was announced, China moved forward with a number of retaliatory measures against the United States.
President Xi recently pledged improvements to market access, IP protection, competitive markets, and monetary policy among other issues. Still, insufficient transparency surrounding opportunities for foreign companies to participate in projects continues to cloud companies’ strategic planning around BRI.
China recently made a series of regulatory changes that took immediate effect and address US technology transfer concerns, including revisions to the Technology Import and Export Regulations and equity JV implementing regulations.
Trade talks to date have touched on a wide range of issues, but have not narrowed differences on structural issues like IP protection, forced tech transfers, and subsidies to China’s state-owned enterprises.
Following Presidents Donald Trump and Xi Jinping’s meeting at the G20, China’s government appeared to address key US concerns around intellectual property rights (IPR) in several announcements.
Various efforts are underway to preserve the WTO by reforming it, but none yet have backing from both China and the United States, the two parties whose support is most critical if reforms are to move forward.
It is uncertain whether Presidents Donald Trump and Xi Jinping will reach an agreement at their December 1 meeting that can lead to a ceasefire in the trade war or resolve some bilateral trade issues.