Donald Trump's campaign pledge to label China a currency manipulator has taken a zig-zagging journey during his tenure in the Oval Office.

First, some background. A weaker yuan, relative to the U.S. dollar, means Chinese goods can be exported more cheaply to the United States, because each dollar in sales revenue translates to more yuan back home. A devalued Chinese currency, therefore blunts the impact of Trump's tariffs on imports from China. 

A U.S. law allows the government to label a foreign country a currency manipulator. If it does, the department must engage with the International Monetary Fund to address China's exchange rate and produce a report about U.S. concerns.

Trump applied the label to China in a tweet on Aug. 5, 2019. In a subsequent Treasury Department statement, Secretary Steve Mnuchin said Chinese authorities, who have "ample control" over the country's money supply, have openly acknowledged their central bank's ability to manipulate China's currency. 

It marked the first time since 1994 that the United States had applied the label to China, and it put Trump and high-profile Democrats such as Senate Minority Leader Chuck Schumer of New York on the same side of the issue.

At that point, this became a Promise Kept. But that wasn't the end of the story.

In January 2020, at a sensitive point in trade negotiations with China, the Trump administration rescinded that label.

The change came with the release of the report required under the August 2019 labeling. The report said that Chinese pledges and subsequent fluctuations in the exchange rate meant that the label could be lifted.

"China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability," Mnuchin said in a statement.

The administration did keep China on a less severe "monitoring list" of trading partners that merit close attention on currency issues, along with Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore, Vietnam and Switzerland.

Critics said Trump's rescinding of the label was shortsighted.

"China is a currency manipulator — that is a fact," Schumer said. "Unfortunately, President Trump would rather cave to (Chinese) President Xi than stay tough on China. When it comes to the president's stance on China, Americans are getting a lot of show and very little results."

Other experts, however, suggested that the rescinding made sense.

The original labeling was done "for political reasons," Chad P. Bown, an international trade expert at the Peterson Institute for International Economics in Washington, told the New York Times. "Clearly there was no legal basis or really an economic basis to do so."

Whether or not labeling China a currency manipulator was justified, the fact remains that Trump said as a candidate that he would do it. After he won, he did it, and then he undid it, seeking to use the rescinding as leverage in trade negotiations. 

We rate this a Compromise.

President Donald Trump delivered on a promise to label China a currency manipulator after its currency, the yuan, fell to its lowest value in more than a decade.

A weaker yuan, relative to the U.S. dollar, means Chinese goods can be exported more cheaply to the United States. A devalued Chinese currency, in turn, blunts the impact of Trump's tariffs on Chinese imports.

Trump applied the "currency manipulator" label to China in an Aug. 5 tweet, before the Treasury Department issued a formal declaration.

"China dropped the price of their currency to an almost a historic low. It's called 'currency manipulation,' " Trump tweeted. "Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!"  

The president's decision to label China a currency manipulator — which the United States last did in 1994 — represents an escalation of trade tensions with Beijing. Trump has long accused China of engaging in unfair trade practices, including intellectual property theft and the dumping of Chinese products on U.S. markets.

In a Treasury Department statement, Secretary Steve Mnuchin formally declared China a currency manipulator, as laid out under U.S. law. Mnuchin said Chinese authorities, who have "ample control" over the country's money supply, have openly acknowledged their central bank's ability to manipulate China's currency. 

The Treasury Department's determination requires, under federal law, that the department engage with the International Monetary Fund to address China's exchange rate.

The Trump administration's declaration that China is a currency manipulator moves this promie from Promise Broken to Promise Kept.

As a candidate, President Donald Trump repeatedly promised that he would declare China a currency manipulator immediately after he took office.  

Twelve weeks in, his mindset has apparently changed.

Trump raised eyebrows in an April 12 interview with The Wall Street Journal with this statement about China: "They're not currency manipulators."

The assessment was a stark departure from the campaign. In his 100-day contract with voters to "Make America Great Again," Trump said he would issue seven actions to protect American workers. Among them: "I will direct the Secretary of the Treasury to label China a currency manipulator."

In accepting the GOP nomination, Trump called out China for "outrageous theft of intellectual property, along with their illegal product dumping, and their devastating currency manipulation.

In his Oct. 22 Gettysburg speech, he reiterated the plan: "I will direct my secretary of the treasury to label China a currency manipulator. China is a currency manipulator. What they have done to us by playing currency is very sad. I don't blame them. They have been very smart. I blame our politicians for letting this take place."

As recently as April 2, 2017, this seemed to still be the plan. During an interview with the Financial Times, Trump said, "When you talk about currency manipulation, when you talk about devaluations, they are world champions."

Exactly 10 days later, Trump sat down for the Wall Street Journal interview with The Wall Street Journal. This interview coincided with Trump and Chinese President Xi Jinping meeting at Trump's Palm beach resort Mar-a-Lago, where they pledged to make progress on trade negotiations within the next 100 days.

According to the Journal, Trump switched gears because China hasn't been manipulating its currency for months and the declaration could pose a problem as both countries work to address the North Korean threat.

Trump held a joint press conference with NATO Secretary General Jens Stoltenberg on April 12. The conference led to the topic of China, and Trump deflected a question about the currency manipulation.  He responded, "We're going to see."

Pressed by reporters to explain the reversal, press secretary Sean Spicer simply said, "Circumstances change."

With Trump on the record as saying the Chinese are "not currency manipulators, we rate this Promise Broken.