U.S. Treasury names two countries as currency manipulators
17 Dec 2020, 17:03 GMT+10
- The U.S. Treasury on Wednesday confirmed the U.S. no longer considers China a currency manipulator.
- The White House in January removed China’s name from the currency manipulators list, just days in advance of the signing of a partial trade deal.
- In its annual Report published on Wednesday, Treasury says it reviewed and assessed the policies of 20 major U.S. trading partners.
WASHINGTON, DC The U.S. Treasury on Wednesday confirmed the U.S. no longer considers China a currency manipulator, a rare win for the Chinese government which has been in a defacto-diplomatic and trade war with the Trump administration during its term in office.
The White House in January removed China’s name from the currency manipulators list, just days in advance of the signing of a partial trade deal.
In its annual Report published on Wednesday, Treasury says it reviewed and assessed the policies of 20 major U.S. trading partners during the four quarters ending June 2020.
The Treasury Department determined that, under the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act), both Vietnam and Switzerland are the only two currency manipulators.
For each country, Treasury says it assessed, based on a range of evidence and circumstances, that at least part of its exchange rate management over the four quarters through June 2020, and particularly foreign exchange intervention, was for purposes of preventing effective balance of payments adjustments and, in the case of Vietnam, for gaining unfair competitive advantage in international trade as well.
Consistent with the 1988 Act, Treasury says it will press for the adoption of policies that will permit effective balance of payments adjustments and eliminate the unfair advantages in trade that result from their actions.
No other major U.S. trading partner met the relevant 1988 or 2015 legislative criteria for currency manipulation or enhanced analysis during the relevant period.
Treasury found that ten economies warrant placement on Treasury’s “Monitoring List” of major trading partners that merit close attention to their currency practices. These are China, Japan, Korea, Germany, Italy, Singapore, Malaysia, Taiwan, Thailand, and India, the last three being added in this Report.
Treasury says it urged China to improve transparency with respect to the management of its exchange rate, in particular regarding official foreign exchange intervention, and increase public understanding of the relationship between the Chinese central bank and the foreign exchange activities of the state-owned banks, including the use of foreign exchange derivatives and activities in the offshore RMB market.
“The Treasury Department has taken a strong step today to safeguard economic growth and opportunity for American workers and businesses,” U.S. Treasury Secretary Steve Mnuchin said Wednesday. “Treasury will follow up on its findings with respect to Vietnam and Switzerland to work toward eliminating practices that create unfair advantages for foreign competitors.”
Wednesday’s Report submitted to Congress outlined how Treasury says it will continue to work actively to dismantle unfair barriers to trade and achieve freer and more reciprocal trade with major U.S. trading partners. This includes combatting unfair currency practices that facilitate competitive advantage, such as unwarranted intervention in curren