USA in China reversal

Trump's threat to slap harsh tariffs on Chinese goods has given way to a bid to mend fences with Beijing.

President Donald Trump on Sunday defended his recent about-face on calling China a currency manipulator, saying he welcomes the county's help in dealing with North Korea.

Before the elections, President Trump had vowed to label China a currency manipulator on Day One of his administration. Treasury finds that six major trading partners warrant being placed on the Monitoring List for special attention: "China, Germany, Japan, Korea, Switzerland and Taiwan", it said. Last week he said in an interview, "They're not currency manipulators".

Also, Seoul's financial authorities intervened on the foreign exchange market throughout 2016 in order to ease a sharp depreciation of the local currency, selling $6.6 billion over the on-year period. On the plus side, a strong dollar lowers import prices, and also makes it cheaper for American investors to buy assets overseas.

"They're not currency manipulators", Trump told The Wall Street Journal, explaining Beijing had not manipulated the yuan for months.

Upon announcing his candidacy in 2015, Trump said that China's currency practices were making it impossible for American companies to compete and declared, "They're killing us". That would have triggered talks between the countries and potentially led to USA sanctions - something experts warned would have prompted retaliation. That, however, would contravene World Trade Organization rules.

"The possibility of a trade war could be ruled out as the USA government has dropped the manipulator claim, " Zhu Jianfang said, adding the two countries have huge space for cooperation, which is good for both sides. "Unfortunately the president's failure to name China a currency manipulator is symptomatic of a lack of real, tough action on trade against China".

The large goods surplus "underscores the need for further opening of the Chinese economy to American goods and services, as well as faster reform to rebalance the Chinese economy toward greater household consumption".

China has purchased hardly any American beef since it conditionally lifted an import ban past year that was imposed in 2003 due to a case of mad cow disease in Washington state.

"The US can not and will not bear the burden of an global trading system that unfairly disadvantages our exports and unfairly advantages the exports of our trading partners through artificially distorted exchange rates", it said.

Since Trump and Xi met, China has reduced coal shipments and threatened the oil trade with North Korea.

President Donald Trump campaigned in the 2016 United States election on the pledge he would end what he claimed was widespread manipulation of currency rates that discriminated against American manufacturers, but the report found no evidence of such policies.

"It would be hard for me to imagine a full on trade war between the USA and China as it would be too damaging to the two greatest economies in the world, and it could easily pull the rest of the world into the biggest recession we will ever see", said John Ling, president of the Council of American States in China.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 per cent in holiday-thinned trade, while Japan's Nikkei shed 0.4 per cent. - File picTOKYO, April 17 - Shares dipped today while the dollar and USA bond yields fell after soft USA economic data hurt investor sentiment already frayed by worries over North Korea and upcoming French elections. Economists say the USA currency could rise further as the Federal Reserve raises interest rates.