Trump accuses China of manipulating currency as yuan weakens
WASHINGTON (AP) — President Donald Trump accused China of manipulating its currency after Beijing let the yuan fall to a politically sensitive level against the U.S. dollar for the first time in 11 years.
The move raised concern that China could use its currency as a weapon in a trade war with Washington
“It’s called ‘currency manipulation,’ ” Trump tweeted Monday morning, adding that, “This is a major violation which will greatly weaken China over time.”
The currency weakened to 7.0391 to the dollar by late afternoon, making one yuan worth 14.2 cents, its lowest level since February 2008.
The level of seven to the dollar has no economic significance but carries significant symbolic weight.
“The thought of a currency war is crossing more than a few traders’ minds,” Stephen Innes of VM Markets said in a report.
The prospect of heightened U.S.-China trade tension sent the Dow Jones industrial average tumbling more than 590 points in midmorning trading.
China’s central bank blamed the yuan’s drop on “trade protectionism” — an apparent reference to Trump’s threat last week to impose tariffs September 1 on the $300 billion in Chinese imports to the United States that he hasn’t already targeted.
The U.S. and China are engaged in a bitter dispute over allegations that Beijing steals trade secrets and pressures foreign companies to hand over technology as part of an aggressive campaign to make Chinese companies world leaders in advanced technologies such as artificial intelligence and quantum computing.