In its half-year report to Congress on currency manipulation, the first report under the Biden administration, the US Treasury Department said that currently no country meets the U.S. criteria for money manipulation. bad.
Vietnam and Switzerland were removed from the list of countries labeled by the United States as currency manipulators, reversing the Trump administration’s decision in December.
In its half-year report to Congress on currency manipulation, the first under the Biden administration, the US Treasury Department said Friday that no country currently meets U.S. criteria for currency manipulation. However, it says that Vietnam and Switzerland, as well as the autonomous island of Taiwan, will be intensified under supervision.
At the higher level of scrutiny the report calls “strengthening commitments,” Vietnam, Switzerland and now Taiwan will be under closer scrutiny of their activities as part of a law set by the National Assembly. through requiring authorities to name the countries allegedly involved. currency manipulation to gain an unfair trade advantage over the US.
The Treasury has not designated China as a currency manipulator, something the Trump administration did in 2019 during a period of trade tensions with the world’s second-largest economy. China is included in the list of 11 countries with lower level surveillance than Vietnam, Switzerland and Taiwan.
Also on the list with China are Japan, Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand and Mexico. Only Ireland and Mexico were added to the list on Friday.
Neither of the countries on the list have economic sanctions imposed on them by the United States for alleged currency manipulation.
Countries accused of manipulation by the US often engage in selling their currencies and buying US dollars as a way to lower the value of their currency while enhancing the value of the dollar. A weaker currency can make a country’s exports cheaper on foreign markets while making imported goods more expensive.
In its history of its twice-a-year reports to the National Assembly since 1988, the Treasury Department viewed only three foreign governments as currency manipulators. The Trump administration designated China as a currency manipulator in 2019 and the US also designated China as a currency manipulator from 1992 to 1994. The Ministry of Finance also imposed that label on Japan and Taiwan in the 1980s.
Being designated as a currency manipulator could mean imposing US economic sanctions if a period of negotiation fails to resolve issues that the US considers objectionable.
Private analysts have supported the Biden administration’s withdrawal of Vietnam and Switzerland as currency manipulators.
Eswar Prasad, a professor of economics at Cornell University, said the new administration decided not to use the report as an overt political tool that enticed US allies.
“This will help to rebuild some of the credibility of the report, so it will serve a useful purpose when it is absolutely necessary in the future to highlight unfair money management practices. of other countries, ”said Prasad.