Wednesday, April 12, 2017

Trump finds his niche: fixing problems that no longer exist - The Washington Post

Trump finds his niche: fixing problems that no longer exist - The Washington Post

President Trump has finally found an economic issue that's not too complicated for him to do something about. That's stopping China from manipulating its currency that it hasn't been manipulating for the past two years.

Trump and Chinese premier Xi Jinping's met for the first time last week, following an election that featured more than the usual amount of China bashing. Indeed, ahead of the meeting, Trump himself promised that their tête-à-tête at Mar-a-Lago was going to be “very difficult” since we could “no longer have massive trade deficits and job losses” with them.

The only snag, as Trump's own Treasury Department could tell him, is that that trade deficit isn't the result of economic chicanery, but rather economic forces. China, you see, isn't holding its currency down anymore to subsidize its exports. In fact, it's doing the opposite: furiously spending down its at-one-point $4 trillion war chest of reserves to try to keep its currency from falling too fast.

  

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