A lot has happened since then-candidate Trump said he would label China a currency manipulator on 'day one' should he make it to the Oval Office. So far, at least, the pledge to hold Beijing accountable for manipulating its currency wouldn't fall into the 'promises kept' column. But that could soon change.
Shortly after the Treasury Department delayed its biannual report on suspected currency manipulators - an ominous indication that the issue might resurface in trade talks after Beijing reportedly balked at a pledge to keep its currency stable - the Commerce Department on Thursday revealed that it's planning to propose a new rule that would allow it to impose anti-subsidy tariffs on imports from countries suspected of undervaluing their currency.
The change would allow the Commerce Department to impose anti-dumping and countervailing duties on products believed to benefit from manipulated currencies. In effect, an artificially depressed currency would be treated as a government subsidy.
Though China wasn't specifically named in the Department's announcement, it presence on the Treasury Department's manipulation 'watch list' - which also includes Japan, South Korea, India, Germany and Switzerland - means Chinese companies would be obvious targets.
And just like that, Wilbur Ross has opened up another front in the US-China trade war - albeit one that could ensnare some of Washington's closest allies, Reuters reports.
"This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm U.S. industries," Commerce Secretary Wilbur Ross said in a statement.
"Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses," he said.
Any tariffs applied under the new policies would be distinct from Trump's punitive trade-war tariffs. But if the past is any guide, anti-dumping tariffs brought about under this rule would make any goods targeted extremely uncompetitive: Anti-dumping tariffs often range between 100% and 200% of the price of a given item.
The announcement was light on details, and the department didn't delve into the criteria that could be used to determine whether a currency subsidy is being applied. But Chinese goods would be an obvious target: The yuan has weakened about 8% against the dollar over the past year. And while analysts have blamed trade-war tensions, some suspect that Beijing - which tightly controls the yuan - has allowed it to weaken to offset some of the Trump administration's punitive tariffs.
According to Bloomberg, the plan has been kicking around the West Wing since shortly after Trump's inauguration, having been pushed by both Ross and Peter Navarro. The plan had reportedly fallen by the wayside, before suddenly rising to the top of the Trump team's agenda in recent weeks (we can only imagine why).
The Trump administration was already preparing to impose tariffs on another $300 billion in Chinese goods. This policy change would effectively be a protectionist 'double whammy'.
Assuming Ross follows through, this is just one more reason to believe that we're in for a protracted trade conflict - something that, as BBG has pointed out, is rapidly becoming Wall Street's 'base case'.