“In recent days, China has taken concrete steps to devalue its currency, while maintaining substantial foreign exchange reserves despite active use of such tools in the past,”Mnuchin said on Monday afternoon. “The context of these actions and the implausibility of China’s market stability rationale confirm that the purpose of China’s currency devaluation is to gain an unfair competitive advantage in international trade.”

Mnuchin’s designation triggers a set of measures mandated under the Omnibus Trade and Competitiveness Act of 1988, including a complaint to the International Monetary Fund (IMF). The law also calls for bilateral talks to eliminate the 'unfair' practice.

President Donald Trump campaigned on the platform of labeling China a currency manipulator but has held off on doing so for the past two and a half years, preferring to escalate the trade dispute with Beijing through tariffs on hundreds of billions of dollars in goods the US imports from China every year.

Accusing China of walking away from the already agreed-upon trade deal, last week Trump announced new tariffs that will go into effect on September 1. 

While most US economists have been appalled at the tariffs, Trump has insisted that China was paying for most of them through currency manipulation, rather than passing the cost onto American consumers. 

Though there has been no official confirmation from Beijing, US media reported on Monday that the Chinese government has ordered a halt to purchases of US agricultural exports – such as soybeans – and switched to imports from Brazil. US soybean exports have already suffered from the trade war, with Trump scrambling to offset the losses by farmers, an important constituency of his going into the 2020 presidential election.

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