The U. S. Treasury again passed up a formal opportunity to designate China a “currency manipulator,” but singled out the nation’s currency practices as…
The U. S. Treasury again passed up a formal opportunity to designate China a “currency manipulator,” but singled out the nation’s currency practices as a source of “particular concern.”
Treasury Secretary Steven Mnuchin faulted China’s “lack of currency transparency and the recent weakness in its currency,” saying in a statement that this poses “major challenges to achieving fairer and more balance trade, and we will continue to monitor and review China’s currency practices.”
Though it passed on calling China a manipulator, the Treasury kept China and five other nations on a formal “monitoring list,” in its semiannual report on foreign-exchange policies of major U. S. trading partners. The report is the official vehicle for making a declaration that a country has manipulated its currency to obtain an unfair trading advantage.
This is now the fourth of the semiannual reports in which the Trump administration has declined to apply the manipulator designation to Beijing. The reason for restraint, the Treasury said, is that China hasn’t intervened significantly in its currency markets in recent quarters. Actual intervention is one of the key criteria for meeting the manipulation threshold.
China, along with Germany, India, Japan, South Korea and Switzerland, remain on the formal monitoring list. The Treasury uses it to place countries on notice that their currency practices have put the U. S. at an unfair disadvantage and that they could be close to triggering action from the Treasury.
The result was largely expected. While President Trump has threatened to label China a currency manipulator, the laws governing the report require countries to meet three thresholds to receive the designation: persistently intervening in currency markets; running a significant trade surplus with the U.
