What is bad about being recognised as a currency manipulator?

The US president Trump has stated that his administration will not recognise China as a currency manipulator, this is a piece of good news for China and its economy in general. Why is it bad to be recognised as a currency manipulator? Almost all governments are suspicious to be involved in manipulating their currencies in some form of ways. As long as central bank members are appointed by their governments, they must be those whom governments believe can serve their interests best. Although governments and countries may conduct some form of currency manipulation, it is bad to be recognised as currency manipulators by other countries, especially countries like the US.

Being recognised as a currency manipulator means countries are hostile to your monetary policies, then they will take actions against your country, sometimes it may start with tariffs on imports from a currency manipulator. Then it will cause a sharp decrease in exports for a country which is recognised as a currency manipulator. If the country's economy largely depends on exports, it could become a disaster for the economic growth, when an important export target country increases its tariffs on its products. The unemployment rate will inevitably increase and a significant number of companies which rely on exporting will bankrupt. When the unemployment rate is high, some other social issues will then appear. In addition, when the US recognises another country as a currency manipulator, its interest-sharing countries will recognise this country as a currency manipulator and increase tariffs on this particular country's products.

Overall, being recognised as a currency manipulator by an important exporting target country is definitely bad for the economy, as it signals that the target country will take actions to change trade volumes between the two countries according to its belief of the "correct exchange rate".