This is the Kator Daily Podcast for Monday, August 19th, 2019. I'm Caleb Brown.

What makes a currency manipulator? Is China's attempt to prop up its currency a threat to the

United States? Is it just a response to punitive tariffs imposed by the Trump

White House? Cato's Dan Iconson makes the case.

For the benefit of listeners and for your humble host,

what makes a country, or at least the Central Bank of that country,

a currency manipulator?

The currency manipulation involves actions taken by policy makers to

suppress the value of of their currency.

It's often done presumably to secure trade advantages to make it easier

for your exporters to price competitively abroad and to make it more difficult for foreign producers to sell their products in your own market.

But really currency manipulation can work in many different dimensions in many different ways,

but the one that is most relevant for the policy

discussion we've been having concerns interventions to prevent currencies

from appreciating. So the Trump administration has labeled China a currency manipulator. What does that mean as a matter of policy?

Well in 1988 a trade law was passed the the omnibus trade act of 1988, which

requires the Treasury Department to issue semi-annual reports on the currencies of major economies.

And the last time any country was labeled a currency manipulator

was back in the early 90s, think 93 and it was China and since then it hasn't

labeled China or anybody else a currency manipulator and throughout the early 2000s and in more recent years there have been assertions that the Chinese have been manipulating their currency,

but the Treasury Department did not come to that conclusion.

They have a variety of criteria that they use, but to answer your question,

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