Trump’s Manipulation of Currency Manipulation
By treating international trade as a zero-sum game in which the US makes its own rules, President Donald Trump's administration has weakened the incentive for countries to engage in policy cooperation. Why should China bow to a US that treats it as an enemy?
LONDON – The weaponization of currency has rarely ended well for the United States. Look no further than the unilateral 1971 decision of President Richard Nixon’s administration to cancel the US dollar’s direct international convertibility to gold – a key element of the “Nixon Shock” that destabilized floating currencies and led to stagflation later in the decade. But that hasn’t stopped President Donald Trump’s administration from (mis)labeling China a currency manipulator.