The U.S. government has determined that China is manipulating its currency, and will engage with the International Monetary Fund to eliminate unfair competition from Beijing, U.S. Treasury Secretary Steven Mnuchin said in a statement on Monday.
China let the yuan weaken past the key 7-per-dollar level on Monday for the first time in more than a decade and later said it would stop buying U.S. agricultural products, inflaming a worsening trade war with the United States.
The sharp 1.4% drop in the yuan comes days after U.S. President Donald Trump stunned financial markets by vowing to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1, abruptly breaking a brief ceasefire in a bruising trade war that has disrupted global supply chains and slowed growth.
The last time the United States named China a currency manipulator was in 1994. The U.S. Treasury had designated Taiwan and South Korea as currency manipulators in 1988, the year that Congress enacted the currency review law. China was the last country to get the designation, in 1994.
The dollar fell to a two-week low against the euro after the Treasury statement.