(Aug 6): The Trump administration formally labelled China a currency manipulator, further escalating its trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation for new US tariffs.

While the US Treasury Department’s determination is largely symbolic, as the potential punishments are a shadow of the steps Trump has already taken against China, it underscores the rapidly deteriorating relationship between the world’s two largest economies. The move immediately roiled markets, with S&P 500 Index futures sliding more than 1% in early Asian trading.

Under the designation, Treasury Secretary Steven Mnuchin “will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions,” the department said in a statement Monday.

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