Additionally, Trump said his administration will not label China as a currency manipulator - a stark reversal from comments he made during his presidential campaign. 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.
A US Treasury spokesman confirmed that the Treasury Department's semi-annual report on currency practices of major trading partners, due out later this week, will not name China a currency manipulator.
This is published unedited from the PTI feed.
That "distortion in the global trading system. imposed significant and long-lasting hardship on American workers and companies".
The Korea International Trade Association welcomed the U.S. decision not to label South Korea a currency manipulator, calling it a "rational outcome".
"It's absurd to call China a currency manipulator at the moment", says Adam Posen, an economist who leads the Peterson Institute for International Economics, which advocates free trade.
Now, China needs to show that its lack of intervention in the currency markets "to resist appreciation" over the past three years is a "durable" policy by allowing the yuan to strengthen "once appreciation pressures resume", the Treasury said.
Economists agree that China doesn't now merit the label of currency manipulator, and has not engaged in the practice for several years.
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Even (Taiwan OTC: 6436.TWO - news) though China has not moved to keep its currency weak in the past three years, the country "has a long track record of engaging in persistent, large-scale, one-way foreign exchange intervention, doing so for roughly a decade", the Treasury Department said.
Japan, South Korea, Taiwan (Taiwan OTC: 6549.TWO - news) and Switzerland also were again included on Treasury's monitoring list.
Commerce Secretary Wilbur Ross has said that the issue of "currency misalignment" - which could also include unintentional devaluations - will be addressed in a study of trade abuses by nations that run large surpluses with the USA, which is due to be ready in June.
"Treasury will be scrutinizing China's trade and currency practices very closely, especially in light of the extremely sizable bilateral trade surplus that China has with the United States", it added.
He had repeatedly railed against the trade imbalance between the United States and China during his election campaign.
The accompanying report used similar language to describe China's past interventions in exchange markets - a shift to a more forceful tone from prior reports issued under the Obama administration, but not one with immediate practical consequences.
Trump told reporters he's pushing Xi to pressure North Korea to abandon development of nuclear weapons and missiles capable of striking the USA, a program that has also alarmed American allies in Japan and South Korea.
This would include more "flexible" government spending policies, and continued reforms to boost the labor market and increase productivity of the Japanese economy.