No currency manipulator labels from US, China on watch – Community News
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No currency manipulator labels from US, China on watch

The Biden administration will not designate any country as a currency manipulator, but it did name China, Vietnam and Taiwan among the countries that have broken global agreements not to use their currencies to gain unfair trade advantages.

In a report to Congress released Friday, the Treasury Department cited China for a number of failures that have prevented trading partners from gaining full knowledge of how it manages its currency.

The Ministry of Finance plans to closely monitor the foreign exchange activities of China’s state-owned banks to get a clearer picture of China’s currency practices, the report said.

Vietnam and Taiwan have violated a number of criteria that justify calling them currency manipulators, and both will be closely watched in the coming months to see what improvements they make to their currency practices, the report said.

The new report placed 12 countries on a monitoring list for more scrutiny. The 12 are China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, Mexico and Switzerland. All countries, with the exception of Switzerland, were on the watch list in the latest April currency report.

“Treasury is working relentlessly to promote a stronger and more balanced global recovery that benefits American workers, including through closer cooperation with major economies on currency-related issues,” Treasury Secretary Janet Yellen said in a prepared statement.

Being called a currency manipulator under US law does not carry immediate penalties, but it does require the Treasury to enter into negotiations with foreign countries in an effort to get it to change its currency practices.

If those negotiations fail, the government could impose trade sanctions. Those sanctions can be challenged by countries at the World Trade Organization.