International Economics: IB Economics

Interesting news emanating from the US, where Switzerland and Vietnam have been labelled currency manipulators. In the case of the latter, the US think that the Vietnamese are keeping the value of their currency artificially low to encourage exports, whereas in the Swiss case it's believed that the currency have been kept low in response to some pandemic-related issues to do with gold purchases, rather than trying to stimulate increased cuckoo clock sales. 

Chinese exports are slowing - which begs the question as to whether this is the result of US tariffs being ratcheted up, or sluggish external demand.

Either way, it is slightly surprising that this should have happened when after the yuan had depreciated, and many expect the Chinese government to respond either by lowering interest rates or banks' reserve requirements in the hope of stimulating higher expenditure. 

I'm a cynic. But this is one of the more interesting recent Project Syndicate articles, that looks at reasons for the continued strength of the dollar, and why President Trump's attempts to suggest that Chinese manipulation of their currency is to blame.

Not only does it deal with the technicalities of why China can't be accused of currency manipulation on the basis of the current definition, it also explains why his own economic policies have helped buttress the dollar. 

Well, I never, the President of the United States, never a man of principle in any field as far as I can make out, has reversed the designation of China as a currency manipulator in the run up to the signing of a preliminary trade agreement. 

Not only has the value of the yuan appreciated recently, but thew Chinese government has given commitments to refrain from intervening in currency markets according to Steve Mnuchin, Treasury Secretary - or Executive Producer of the Lego Movie, if you prefer. 

Let's see how this pans out - I'll give you a clue - little will change and the US will still run a substantial trade deficit with China...

At last, signs of a de-escalation of tension in the US-China trade war with the US not labelling China a "currency manipulator" something that President Trump has done in the past.