Trump Will Break Promise on China Currency, Schwarzman Predicts

(Bloomberg) -- President Donald Trump is unlikely to designate China a currency manipulator this month, breaking a campaign promise, and may "circle back" on health-care legislation that failed in the House, one of his top outside economic advisers said.

The Trump administration is expected to issue a report in mid-April that will include a determination on whether China manipulates its currency, the renminbi. “I would doubt that would happen,” Stephen Schwarzman, Blackstone Group chairman and chief executive officer said Tuesday in a Bloomberg Television interview.

Trump’s plan to overhaul the tax code, meanwhile, will follow “a more deliberate, logical approach than trying to pass health care in 17 days,” Schwarzman said. “That is not going to happen” for the tax plan, he said.

The health-care bill may not be dead, though. Trump may “circle back on health care,” he said. “It sort of has difficulty being dead and gone. I think there’s work going on in the House. How long that will take, I don’t know, but people are talking and ultimately they should be able to get something out of the House.”

Advisory Panel

Schwarzman chairs a panel of U.S. corporate executives who advise Trump, called the Strategic and Policy Forum, and led the second meeting of the group at the White House on Tuesday.

“At the top of our agenda is the creation of great, high-paying jobs,” Trump said at the meeting. Reporters were escorted out before the CEOs gave Trump their advice. It is not clear how the group of CEOs -- or others Trump periodically meets at the White House -- are influencing his administration’s policies, if at all.

Schwarzman said China didn’t come up Tuesday in his meeting with Trump and five cabinet secretaries, or in the CEOs meeting.

Schwarzman has said in the past that he believes the rise of China, as both an economic and military power, will be the world’s most important foreign policy issue over the next half century or more. The billionaire has led investments in the country for a decade, and one of China’s sovereign wealth funds owns about 5 percent of New York-based Blackstone. In 2013 he started Schwarzman Scholars, a Rhodes Scholarship-like program at Beijing’s Tsinghua University for students from around the world.

Schumer Criticism

The Senate Democratic leader, Chuck Schumer, told reporters in a conference call on Tuesday that Trump should designate China a currency manipulator and pressure Chinese leaders to end subsidies for aluminum and other commodities. Trump hasn’t done enough to crack down on China’s theft of intellectual property from U.S. businesses or force the country to more fully open its markets to foreign competition.

“For far too long, China taken us to the cleaners as far as the economy,” Schumer, of New York, said. “I can’t think of a single job they have saved by a single action against China."

An administration official said Monday that the Trump administration is examining a presidential directive calling for a review of trading practices, including the dumping of steel and aluminum into the U.S. at below-market prices. The official described the proposal on condition of anonymity because it’s not final.

Trump’s meeting with Chinese President Xi Jinping last week at his Florida resort, Mar-a-Lago, “were good meetings,” Schwarzman said, after predicting that Trump would break his campaign promise to declare the country a currency manipulator.

Trump said in the “Contract with the American Voter” he issued before his Nov. 8 election that he would “direct the secretary of the Treasury to label China a currency manipulator.”

Schumer also said Tuesday that Trump’s refusal to release his tax returns may complicate legislation to overhaul the tax code.

“He just has an obligation to come clean,” Schumer said. “When you clean up the swamp, it’s not keeping things secret.”

To contact the reporters on this story: Jennifer Jacobs in Washington at jjacobs68@bloomberg.net, Terrence Dopp in Washington at tdopp@bloomberg.net, David Westin in Washington at dwestin@bloomberg.net.

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Kevin Whitelaw