Economists Say Trump Might Have His Facts Wrong On China

The president-elect has argued China is manipulating its currency to increase its exports.
Posted at 6:08 PM, Dec 05, 2016

During the campaign season, Donald Trump promised to call out China as an economic cheater. 

And on Twitter on Sunday, he did just that, accusing the country of devaluing its currency on purpose. 

But economists don't think the president-elect has all his facts straight on China. 

Trump has argued China's government is artificially making its currency less valuable resulting in cheaper Chinese products, making other countries more likely to buy Chinese goods than American. 

But history's shown that if a country devalues its currency too much, it becomes worthless. In the 1920s, Germany's inflation got so out of control its bills were used as wallpaper

Economists say China's government is trying to do the opposite and make its currency more valuable. 

It's using a more hands-off approach, allowing the worldwide markets to have a bigger impact on its currency.

But China's economic growth has slowed down. So if the government does nothing, the currency will devalue naturally. 

So if China does what Trump wants and keeps its hands out of its currency, the value of the yuan will go down. Chinese products will be more affordable for other countries, and that's not good for the U.S. economy.

SEE MORE: China Isn't Happy About Trump's Chat With Taiwan

Trump's economic comment was part of a series of recent moves — including a phone call with Taiwan's president — that many fear may have alienated Beijing