The Treasury Department has not found that any country meets its criteria for currency manipulation in a much-anticipated report that for the first time says any country that accounts for “a large and disproportionate share” of the U.S. trade deficit will be more closely monitored.
[Jenny Leonard, Jack Caporal and Isabelle Hoagland] April 20th, 2017 [Inside U.S. Trade]
The semi-annual currency report to Congress — released April 14 and long awaited for a verdict on China that was rendered earlier last week by President Trump — listed the same countries on its monitoring list as it did in its last report, issued in October 2016: China, Germany, Japan, Korea, Taiwan and Switzerland.
Each of those six has met two of the three criteria for currency manipulation, as laid out in the Trade Facilitation and Trade Enforcement Act of 2015: a bilateral trade surplus with the U.S. that is larger than $20 billion; a material current account surplus larger than 3 percent of a country’s GDP; and “persistent, one-sided intervention [when] net purchases of foreign currency, conducted repeatedly,” exceed 2 percent of an economy’s GDP over 12 months, the report states.
The new report says that as an “added measure,” the Trump administration will “add and retain on the Monitoring List any major trading partner that accounts for a large and disproportionate share of the overall U.S. trade deficit even if that economy has not met two of the three criteria from the 2015 Act.”