President Donald Trump is taking steps to reshape U.S. foreign exchange trading strategy, according to people familiar with the plan.
Trump is proposing a foreign exchange-driven strategy that would allow him to sell more foreign currency to foreign governments, according an outline provided to lawmakers.
Trump’s new strategy, first reported by The Hill, is meant to counter the rising tide of Chinese economic pressures, which has prompted the Treasury Department to start warning about potential risks from the yuan, the currency of the People’s Republic of China.
While Trump’s plan could put pressure on the Treasury to stop issuing the currency, it could also help the president’s economic agenda.
The plan would also allow him more flexibility in how he uses foreign currencies to hedge against inflation, which would help the U.N. transition its currency controls to a new system.
While the plan is a first step, Treasury Secretary Steven Mnuchin said last week he would look into it more closely in the coming months.
“We want to take a look at it and make sure it’s going to be working for us,” Mnuchin told The Hill in an interview on March 24.
The White House has not responded to a request for comment.
Trump’s approach is similar to a proposal floated by the Obama administration last year.
That proposal would have seen the Treasury begin using the yuan to counter Chinese inflation.
The Treasury Department did not respond to questions about Trump’s strategy.
The White House said the Trump administration is “actively” reviewing the plan and would take a more detailed look.
Mnuchin told lawmakers last month that the new strategy would allow the U,S.
Treasury to trade more with foreign governments.
“I think that’s a very important part of foreign exchange, and it’s something we’re working on,” Mnutts deputy national security adviser Mark Corallo told The New York Times.
“The Treasury Secretary is working on it right now, and we’ll make sure that we get it right.”
Mnucci told The Wall Street Journal last month the administration is working to establish a mechanism to make it easier for the Treasury secretary to use the yuan as a hedging currency for foreign currencies.
“This is a really important part,” Mnutan said.
“We are actively working to create that mechanism.
I don’t know if we have a date set for that.”
The move is also likely to be seen as a way to reduce tensions between the U:1/2 US Treasury is trading more than $1 trillion of foreign currency in U.s. dollars.
China is the biggest buyer of the U dollar.