The Trump administration will drop its designation of China as a currency manipulator on the eve of signing the first phase of a long-awaited trade agreement with Beijing, a person familiar with the matter said Monday.
The Treasury Department is expected to take the action before the signing ceremony at the White House on Wednesday. The agreement addresses some concerns about China’s currency manipulation that were cited when the U.S. announced the manipulator designation last summer.
China will commit to not depress its exchange rate and will make additional disclosures about its foreign-exchange practices, the Wall Street Journal reported, citing a senior U.S. official.
Senate Minority Leader Charles E. Schumer, New York Democrat, said Mr. Trump was failing to follow through with his tough talk on China.
“China is a currency manipulator—that is a fact. Unfortunately, President Trump would rather cave to President Xi [Jinping] than stay tough on China,” Mr. Schumer said. “When it comes to the president’s stance on China, Americans are getting a lot of show and very little results.”
The designation could have led to U.S. tariffs as a penalty, but the administration already has been imposing tariffs on Chinese goods since 2018. China has responded with its own tariffs on various U.S. goods, and stopped buying agricultural products such as soybeans.
Stocks closed higher on Monday amid the reports that the U.S. will stop designating China as a currency manipulator, as optimism about the trade agreement continued to spur a bull market. The S&P 500 gained 0.7% to close at a record-high 3,288 points. The tech-heavy Nasdaq rose 1% to hit its all-time high at 9,273 points.