Today’s Bloomberg article notes that my one-time coauthor Peter Navarro has pushed to have countervailing duty (CVD) investigations augmented with assessments of currency unvervaluation. A prominent target of CVD investigations has been China.
Figure 1: USD/CNY bilateral nominal exchange rate (blue, left inverted scale), and real trade weighted (broad) value of the CNY (red, right scale). May 2019 observation is for first 20 days. Light orange denotes Trump administration. Source: Federal Reserve via FRED, BIS.
Figure 2: China foreign exchange reserves, in millions of USD, through April 2019 (blue). Source: TradingEconomics.com accessed 5/23.
While the value of the inflation-adjusted CNY in April was the same that it was the month Mr. Trump took office, this is not conclusive evidence