The Trump administration said on Tuesday, May 28th, that no major trading partner met its currency manipulation criteria but nine countries, including China, required close attention, as Washington presses tariffs and negotiations to address trade deficits.
The Treasury Department, in a semi-annual report to Congress, said it reviewed the policies of an expanded set of 21 major US trading partners and found that nine required close attention due to currency practices, Reuters has reported.
Ireland, Italy, Malaysia, Singapore and Vietnam were new additions to the watch list, which also includes China, Germany, Japan and South Korea. India and Switzerland were removed from the list of countries under extra scrutiny.
The Treasury's three criteria for determining whether a country can be labelled a currency manipulator previously were a significant trade surplus with the United States, a sizeable current account surplus and evidence of one-sided, persistent currency intervention.
Moreover, the Treasury expanded its monitoring criteria to include not just America's 12 largest trading partners but any country with more than $40 billion in bilateral goods trade. It also lowered the current account surplus threshold from 3% of GDP to 2%, suggesting an expanded list of countries surveyed.
Then, against the backdrop of rising trade tensions with China, it said the yuan's appreciation would likely exacerbate the US trade deficit. However, US officials had found Beijing appeared to be doing little to directly intervene in the currency's value.
In response to the report, Singapore's central bank said it does not manipulate its currency for export advantage, while Malaysia said its interventions are limited to ensuring an orderly market and avoiding excessive volatility.
President Donald Trump has imposed tariffs on $200 billion worth of Chinese imports and begun the process of imposing tariffs on another $300 billion in Chinese goods.
The Treasury Department said Washington believes direct foreign exchange intervention by the People's Bank of China has been limited in the past year.