Well, it is something that administrations

have considered in the United States for close to 20 years.

It is something that the Trump administration has been talking

about since the very beginning of the administration,

but it kind of fell off the radar.

Donald Trump made it very clear that it was something

he wanted to do, and then was talked out of it internally,

and it wasn't really a part of the early trade discussions

within the administration.

But now a lot of the people who resisted have left

and it looks like other people who have resisted

- people like Steve Mnuchin at Treasury

and Robert Lighthizer at the US Trade Representative's Office

- have given in to this demand.

So, why now?

The problem for the United States Treasury

and for the White House is there aren't

a lot of really good options to do anything

about the value of the yuan versus the dollar,

and here's the reason why.

The dollar is overvalued against a bunch

of different currencies.

The dollar is overvalued in general.

The United States is about 25 per cent of global trade,

but the dollar itself is used, it says, for about 60

per cent of central bank reserves.

It's a comparable percentage.

We think about 50 per cent to 60 pe cent

of the denominations of international trade contracts.

The dollar is used far beyond its value of buying things

that are made in America.

That means that the dollar is going

to be artificially high which means if you make things

in America and you want dollars for them

you're going to have a hard time selling abroad.

This is true all over the world.

It's not just true in China.

And particularly for the last five years or so the Fed,

until very recently, was in a hiking cycle.

It was making it more attractive to move

your capital to the United States and invest.

The European Central Bank and the Bank of Japan

were doing the exact opposite.

There we're sort of discouraging the value of assets.

They were driving down the value of assets,

which again discourages people from buying those currencies.

So if you want to do something about the value of the dollar,

and it's not just Donald Trump who wants to do this.

Elizabeth Warren, running for president,

a Democratic senator, has said as an explicit part

of her campaign plan that she wants

to make sure that the dollar drops

in values against other currencies

to encourage American manufacturing.

So what you have to do is convince the Fed that it's got

to drop way below what's indicated it's preparing

to drop, and then you have to get a bunch of other central

banks - over which you don't even have jawboning control,

you don't even have any modicum of political control -

to do you a favour basically, and raise rates on their own

economy to encourage investment from abroad in their economy.

That all feels unlikely.

And so right now, all the Trump administration really can do

is jawbone.

All it can do is say: we think that the dollar

should be less value.

They can say: we're considering changing

the 20-year-old strong dollar policy.

Now, they haven't explicitly said

they're changing the 20-year-old strong dollar policy the United

States, but they're definitely acting

like they're reconsidering it.

Again, this isn't a unilateral decision.

The Democrats were thinking about this as well.

Chuck Schumer urged the White House

to declare China a currency manipulator.

So all this leads us back to the original question.

Why declare China a currency manipulator now?

Well, the answer is they needed to do something,

and right now it's the only thing they can do.