US Treasury Report | No major trading partner of the United States has manipulated its currency

(Washington) None of the major trading partners of the United States – notably China – manipulated its currency last year to take undue advantage, says the US Treasury, which however added Taiwan and Vietnam to its list countries under surveillance.

Posted at 10:28 a.m.

The semi-annual report, released Friday and presented to Congress, focuses on countries with large trade surpluses that intervene in the foreign exchange market to prevent their currencies from appreciating, which would make their exports less competitive.

The third yardstick is the size of their current account surplus, a broader measure of trade that includes financial flows.

Switzerland exceeded U.S. thresholds in all three categories in calendar year 2021, prompting further bilateral talks between the two countries, senior Treasury officials said during a briefing. conference call.

Discussions must continue with the Swiss authorities on its intervention in the foreign exchange markets in order to prevent the Swiss franc from strengthening, they added.

A total of 12 countries are currently under surveillance: China, Japan, Korea, Germany, Italy, India, Malaysia, Singapore, Thailand, Taiwan, Vietnam and Mexico, detailed the treasure.

Under the administration of former President Donald Trump, the United States briefly named China, along with Vietnam and Switzerland, as currency manipulators. But these countries were then removed from this list.

In this latest report, the Treasury insists that the Biden administration “strongly opposes attempts by United States trading partners to artificially manipulate monetary values ​​to gain an unfair advantage over American workers”.

On China, the Treasury points out that although the country has a large bilateral trade surplus with the United States, it has not met the other two criteria to be accused of manipulation.

A Treasury official, however, acknowledged that it was difficult to properly assess the situation due to the lack of in-person meetings due to COVID-19.

“Over the past two years, it has been more difficult to discuss issues with China because we don’t see Chinese delegations in person, as we used to” before the pandemic, he said. he declares. “In some ways, it’s always more efficient to be able to have face-to-face communications and we’ve certainly benefited from that with our other partners around the world.”

That being said, “we are able to engage in conversations with China, we have regular telephone communications with them at various levels. So we are able to raise issues with them and we certainly press them on a range of issues related to exchange rate issues,” he said.

“China’s inability to publish foreign exchange interventions and the broader lack of transparency around key features of its exchange rate mechanism make it an exception among major economies, and the activities of China’s state-owned banks in particular justify close surveillance of the Treasury”, underlines the report.

In a statement, Treasury Secretary Janet Yellen said the administration is encouraging its major trading partners to “carefully calibrate policy tools to support a strong and sustainable global recovery.”

“An uneven global recovery is not a resilient recovery” since it “exacerbates global imbalances”, she argued.


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