Along with using tariffs to wage trade wars, US President Donald Trump has long been obsessed by the idea that foreign countries are cheating the US by keeping their currencies artificially low. Now he has managed to unite those twin obsessions into a potentially dangerous new rule that could spark more trade tensions and potentially further roil relations with China, Japan, and the European Union.

Last week, the US Commerce Department completed a new rule that will allow Washington to levy tariffs on countries it believes are undervaluing their currency, which theoretically makes their exports cheaper and gives them an edge in competition with American – made goods. US countervailing duties, normally reserved for use against certain imports that are proved to be dumped at below – market prices, could now be slapped on imports from any country that the Commerce Department decides has cheap money.

Foreign Policy