Brazil says trade war is in the offing

Jan. 10, 2011 at 2:33 PM

BRASILIA, Brazil, Jan. 10 (UPI) -- Brazilian Finance Minister Guido Mantega said currency manipulation by China and the United States was sparking a trade war.

Mantega said, "This is a currency war that is turning into a trade war," saying he would take up the issue with the World Trade Organization and other international agencies, the Financial Times reported Monday.

He also said Brazil would make additional moves to protect the real, Brazil's currency, after the country's central bank last week put restrictions on short selling of the dollar against the real.

"You can expect more measures on the futures market," he told the Financial Times.

Aggressive U.S. monetary policies had shifted Brazil's annual trade surplus with the United States to a deficit, he said. In addition, China's currency policy had "some problems" he said.

"We have excellent trade relations with China … But, of course, we would like to see revaluation of the renminbi," he said.

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