China is no longer labeled as a currency manipulator according to the Treasury Department.
In an update to its Foreign Exchange Report, released late Monday ahead of the signing of the phase one trade deal set for Wednesday, Treasury determined China should no longer carry this label.
"In this agreement, China has made enforceable commitments to refrain from competitive devaluation and not target its exchange rate for competitive purposes. China has also agreed to publish related information related to exchange rates and external balances."
FOX Business was among the first to report the U.S. would drop the negative label before the phase one deal was signed.
Following the report, U.S. Trade Representative Robert Lighthizer, told FOX Business' Lou Dobbs the Chinese will be held accountable.
"I would say in this agreement there are a variety of real structural changes one of those is a commitment on currency" and then he called it an "enforceable commitment on currency."
China’s removal from the list was a "want" from Beijing before the deal is signed. Being included on the list impacts China’s ability to grow its economy, possibly limiting growth.
U.S. Sen. Chuck Schumer (D-NY) protested the move, in a statement saying:
“China is a currency manipulator—that is a fact. Unfortunately, President Trump would rather cave to 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.”
Last month, the U.S. and China agreed to a partial trade deal that calls for Beijing to purchase up to $200 billion of American products over the next two years, in addition to protecting against intellectual property theft and technology transfer. Beijing also agreed to end the manipulation of its currency, the yuan.
In return, the U.S. agreed to reduce tariffs on Chinese goods, but will still levy duties against $380 billion of those products.
The Treasury Department designated China as a currency manipulator on Aug. 5, after the yuan fell to a more than 10-year low against the U.S. dollar. At the time, the Treasury Department pointed to Beijing’s “long history of facilitating an undervalued currency through protracted, large-scale intervention in the foreign exchange market” as the reason for the designation.
Beijing manipulated its currency, the yuan, throughout the 1980s and 1990s in order to keep labor and production costs low as it opened up its economy.
The offshore yuan has weakened by 3 percent to 7.0988 per U.S. dollar since China was named a currency manipulator in August, and is down 1.1 percent this year, according to data from Tullett Prebon.
FOX Business' R.N. White contributed to this report.