Bessent Declines China Manipulator Label Despite Estimates Yuan Is 20% Undervalued
Updated
Updated · Fortune · May 14
Bessent Declines China Manipulator Label Despite Estimates Yuan Is 20% Undervalued
3 articles · Updated · Fortune · May 14
Treasury in June 2025 stopped short of branding China a currency manipulator, saying only that Beijing lacked transparency even as Scott Bessent headed to Beijing for talks.
Brad Setser estimates the yuan is about 20% undervalued and says China now meets the technical case more clearly than in 2019 because roughly $2.5 trillion in foreign assets may sit off SAFE's balance sheet.
Bessent has publicly downplayed the issue, noting the yuan was stronger against the dollar and calling it a closed currency rather than accusing Beijing of active devaluation against the United States.
Analysts say Washington may be prioritizing other pressure points, with China controlling 90% of processed rare earths and the Trump administration seeking narrower summit wins such as a $50 billion soybean pledge or Boeing orders.
The result is a largely static U.S.-China economic relationship: no push for a structural currency reset, just efforts to preserve stability and produce headline-friendly deliverables.
Is the US-China currency dispute about exchange rates or a battle for control of the global financial system?
As the US plans a currency fight, is China's gold buying and resource control the real power play?
2026 U.S. Treasury Currency Assessment: Why the U.S. Holds Back on Labeling China a Manipulator
Overview
The U.S. Treasury’s 2026 currency report marked the first use of strengthened analytical standards, introduced under the Trump administration, to provide a more detailed evaluation of countries’ foreign exchange policies. These standards focus on identifying nations that intervene in currency markets to prevent their currencies from strengthening, which can keep exports artificially cheap and create unfair advantages in global trade. This approach sets the stage for the Treasury’s ongoing scrutiny of international currency practices, especially regarding countries like China, whose policies have significant impacts on global competitiveness and trade dynamics.