US Treasury says no major trading partner manipulates currency

WASHINGTON -- The US Treasury Department on Friday said that no major trading partner of the United States meets the criteria as a currency manipulator, but Vietnam, Switzerland and China's Taiwan will be under enhanced monitoring for their currency practices.

In its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, the Treasury Department concluded that Vietnam, Switzerland and Taiwan met all three criteria for enhanced currency analysis under the Trade Facilitation and Trade Enforcement Act of 2015 during the four quarters through December 2020.

However, there is "insufficient evidence" to make a finding that Vietnam, Switzerland, or Taiwan manipulates its exchange rate for either of the purposes referenced in the Omnibus Trade and Competitiveness Act of 1988, the department said.

The US Treasury believed that "enhanced engagements" with Switzerland, Vietnam and Taiwan will enable it to better determine whether any of these economies intervened in currency markets to "prevent effective balance of payments adjustment or gain an unfair competitive advantage in trade."

No other major US trading partner met the relevant 1988 or 2015 legislative criteria for currency manipulation or enhanced analysis during the review period, according to the US Treasury.

But the Treasury put eleven economies, namely China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico, on its "monitoring list," which means currency practices of these economies will bear close attention of the US government.

The report was the Biden administration's first foreign-exchange policy report to US Congress, reversing a decision made by the Trump administration in December that Vietnam and Switzerland were labeled as currency manipulators.