The Trump administration finalizes rule that could shift tariff fights to $6 trillion currency market
- The Trump administration has finalized a controversial rule that would allow the US to hit alleged currency manipulators with tariffs.
The rule targets products found to unfairly benefit from devaluation, according to a Federal Register document published Tuesday, and will take effect April 6.
Past administrations have avoided such a policy for fear that it could lead to damaging currency wars and that the determination process was flawed.
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The Trump administration has finalized a controversial rule that would allow the US to hit alleged currency manipulators with tariffs, opening a potential new front in ongoing economic disputes.
Under the new regulation, anti-subsidy tariffs can be levied against foreign competitors accused of undervaluing their currencies against the dollar. The rule targets products found to unfairly benefit from devaluation, according to a Federal Register document published Tuesday, and will take effect April 6.
In a statement Monday evening, Commerce Secretary Wilbur Ross hailed it as "an important step" to remedy a system he said put the US at a disadvantage.
"While successive administrations have balked at countervailing foreign currency subsidies, the Trump administration is taking action to level the playing field for American businesses and workers," Ross said.
The move was formally proposed by the Commerce Department in May, but President Donald Trump has pushed for a crackdown on currency manipulation since before he took office. Past administrations have avoided such a policy because they argued that the determination process was flawed and could lead to damaging currency wars.
"Horrible policy," Mark Sobel, a former senior US Treasury official and adviser to the OMFIF economic policy think tank, wrote on Twitter. "If dollar overvalued due to US policy, will Commerce sanction those undervalued on flip side?"
Bloomberg reported in June that Treasury Department officials opposed the rule when it was first rolled out, saying that the process could politicize foreign-exchange policy. A spokesperson for the department did not respond to an emailed request for comment.