On the campaign trail, Trump told voters that on his first day in the White House, he would label China a currency manipulator, a public shaming that could trigger trade sanctions.
No major trading partner is manipulating its currency for an unfair trade advantage, according to the first foreign-currency report released by the US Treasury Department under US President Donald Trump on Friday. The report kept China, Japan, South Korea, Taiwan, Germany and Switzerland on a watch list as they met some of the criteria.
South Korea met only two out of three criteria to become a currency manipulator - trade surplus, current account surplus and market intervention.
President Donald Trump said on Wednesday that his administration will not label China a currency manipulator, backing away from a campaign promise, even as he said the USA dollar was "getting too strong" and would eventually hurt the economy.
The Wall Street Journal paraphrased Trump as saying that the reason he changed his mind on the currency issue was because China has not been manipulating its yuan for months and because taking the step now could jeopardize his talks with Beijing on confronting the threat from North Korea. Not since 1994 has the United States designated China a currency manipulator.
Economists agree that China doesn't now merit the label of currency manipulator, and has not engaged in the practice for several years.
While Trump and Chinese President Xi Jinping last week agreed to 100-day trade talks, USA business leaders in China have expressed concern about a lack of progress in gaining further access to the Chinese market despite years of negotiations.
Zhou said plans for the USA and China to spend 100 days looking for ways to tackle the trade imbalance were "just a beginning" and could result in China lifting a ban on American beef and opening up its financial market in the short term. "When the President fails to label them a currency manipulator, he gives them a green light to steal our jobs and wealth time and time again", Schumer said.
That "distortion in the global trading system. imposed significant and long-lasting hardship on American workers and companies".
China, which has since 2011 joined Russian Federation to veto six UN Security Council resolutions on Syria, abstained from a vote Wednesday on a USA -led proposal criticizing last week's chemical weapons attack.
"Treasury also places high importance on greater transparency of China's exchange rate and reserve management operations and goals", said the report.
China does not fully meet the department's definition of a currency manipulator because it has recently been buying yuan to prevent a sudden drop in the Chinese currency, instead of steering it lower.
The report also called on Japan to do more "to revive domestic demand and combat low inflation while avoiding a return to export-led growth".
The comments highlight the president's protectionist stance, however they may contradict his tax reform policies and plans for increased spending on major infrastructure projects.