The Treasury Department announced Wednesday (May 29) in a report to Congress that of the 21 major U.S. trading partners, only nine need further scrutiny because of their currency practices.
Reuters, citing the semi-annual report, reported that the Treasury Department added Ireland, Italy, Malaysia, Singapore and Vietnam to a watch list that already includes China, Germany, Japan and South Korea. Reuters reported India and Switzerland were removed from the list.
The report is typically released in April, but the deadline was pushed back because the Treasury added to the monitoring criteria to include any country that had more than $40 billion in bilateral goods traded. Before, the monitors only covered the twelve biggest trading partners of the U.S. Reuters reported that the account surplus threshold is now 2 percent of GDP, down from 3 percent. Reuters noted that report in October didn’t name China or any trading partner as a currency manipulator. The Treasury said it doesn’t think China is intervening in the value of the yuan even though an increasing yuan would worsen the U.S. trade deficit.
China’s foreign ministry spokesman Lu Kang told Reuters that China doesn’t want to see the U.S. conduct assessments of other country’s current rates. “Whether a country is manipulating its currency is not determined by the United States,” Lu said at a daily media briefing in Beijing that was covered by Reuters. “Relevant multilateral organizations have long had authoritative assessments of countries exchange rates.” A Chinese official said in a state media interview that it never devalues its currency, while Singapore’s central bank said it doesn’t manipulate its currency for export advantage. Meanwhile, Malaysia told Reuters interventions are only to ensure an orderly market and to prevent too much volatility.
In the past, the Treasury looked at whether or not there was a big trade surplus with the U.S., a large current account surplus and proof of one-sided currency intervention to deem a country a currency manipulator, noted the report.