The United States Secretary of the Treasury, Scott Bessent, hinted that China may be on a list of countries under special scrutiny for currency manipulation.
In an interview with Bloomberg on Thursday, February 6, when asked if China is included in the list of countries under special scrutiny for currency manipulation, Bessent replied, “I think we will see the results on April 1st.” During President Trump’s first term, China was designated as a currency manipulator.
The Treasury Secretary went on to say, “China has the most unbalanced economy in world history, and they are currently experiencing a severe downturn. They are going through monetary tightening and trying to overcome their difficulties through exports.”
Bessent indicated that the United States seeks fair trade and will not allow a flood of Chinese exports into the country again. “We want fair trade. Part of that is taking a tough stance on currency and trade conditions,” he said.
President Trump announced a 10% tariff on Chinese exports to the United States, starting from the 4th of the month, citing the Chinese Communist Party’s inadequate efforts in combating the smuggling of illegal drugs into the U.S., including fentanyl.
Regarding the strong dollar policy, Bessent stated, “We want the dollar to be strong. But we also do not want to see other countries manipulate trade by devaluing their currency.”
He pointed out that many countries have amassed significant trade surpluses through unfair trade practices with the U.S., without establishing a free trade system.
Bessent mentioned that the current situation may be partly due to exchange rates, and some countries may be artificially lowering their interest rates, but he did not single out any specific country.
When asked if Trump’s tariffs would lead to inflation in the U.S., Bessent first refuted this claim. He stated that tariffs might initially cause a minor one-time price adjustment, as was seen during Trump’s first term, but with deregulation and other complementary policies, inflation figures would remain close to the Federal Reserve’s target level.
“So I’m not worried about it. I especially believe that, considering China’s current excess capacity—regardless of the level of tariffs—(China) will eventually absorb a substantial amount of the tariffs,” Bessent said.