Backing away from a campaign pledge, President Trump said Wednesday that his administration won’t label China a currency manipulator in a report due this week, though he does think the U.S. dollar “is getting too strong.”
Trump also said in an interview at the White House with the Wall Street Journal that he would prefer that the Federal Reserve keep interest rates relatively low. And he reversed another campaign stance by saying he supports the U.S. Export Import Bank.
The president left open the possibility of re-nominating Janet L. Yellen for a second four-year term as Fed chair. That would mark another shift from his campaign position that he would probably replace Yellen when her term as chair ends in February.
In the interview, Trump said, “I do like a low-interest rate policy, I must be honest with you.”
The decision not to label China a currency manipulator represents one of the sharpest reversals of Trump’s brief presidency. Trump began to bash China in the 2015 speech that began his campaign, saying Beijing kept its currency artificially low to give its manufacturers an unfair advantage in global trade.
A weaker Chinese currency, relative to the dollar for example, makes Chinese goods more affordable for American consumers and U.S. goods more expensive in China.
As a candidate, Trump pledged to instruct his Treasury secretary to label China a currency manipulator immediately after he took office.
But in Wednesday’s published interview with the Journal, Trump said he had changed his mind because he now believes — as many experts have consistently maintained — that China hasn’t been manipulating its currency for months, and because labeling Beijing a manipulator might jeopardize his talks with the Chinese on confronting the threat of North Korea.
“They’re not currency manipulators,” Trump said.
On the dollar’s overall value against major trading partners, Trump said: “I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting — that will hurt ultimately.”
The dollar began rising in value in mid-2014, a trend that has exerted a drag on U.S. exports.
Trump was highly critical of Yellen during the fall campaign, accusing her of keeping borrowing rates low to help Democrats.
But asked during the Journal interview whether Yellen would be “toast” when her term ends next year, Trump said no.
“I like her, I respect her,” Trump said, noting that the two have met since he took office for an Oval Office discussion.
The president said he planned to fill two vacancies on the Export Import Bank’s board, which has been effectively paralyzed with three open seats on its five-member board. Exporters say the bank acts as an important financing mechanism for overseas deals.
The Republican base has opposed the bank, considering it “crony capitalism” for big corporations. Trump took a similar stance during his campaign.
“It turns out that, first of all, lots of small companies are really helped, the vendor companies,” Trump told the Journal. “But also, maybe more important, other countries give [assistance]. When other countries give it we lose a tremendous amount of business.”