US Treasury Department Stops Short of Calling China a Currency Manipulator

US Treasury Department Stops Short of Calling China a Currency Manipulator

"Additionally, US Department of the Treasury established a "Monitoring List" of major trading partners that merit close attention to their currency practices". The twice-a-year document is required by law. Germany, South Korea and Switzerland should increase public borrowing to support domestic demand for goods and services, the report suggested.

All six countries had been named by Obama's Treasury Department as well.

"Expanding trade in a way that is freer and fairer for all Americans requires that other economies avoid unfair currency practices, and we will continue to monitor this carefully", Treasury Secretary Steven Mnuchin said in a statement.

A 2015 law requires the Treasury Department to review the currency practices of major trading partners using three criteria, including exporting more than it imports to the US, and persistently buying or selling its currency to change its value.

And Germany, as part of the eurozone, can not act unilaterally to change the value of the euro.

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After a friendly meeting in Florida with Chinese President Xi Jinping last week, Trump changed his mind and told the The Wall Street Journal in an April 12 interview that "they're not currency manipulators". "China steals our intellectual property, doesnt let American companies compete in China, and has manipulated their currency causing the loss of millions of jobs", said Senate Minority Leader Charles E Schumer.

China's Ministry of Foreign Affairs did not immediately respond to a request on Saturday seeking comment on the report.

He said progress on trade was needed to narrow the deficit between the two countries but that should be achieved through increasing United States exports to China, not cutting U.S. imports of Chinese goods. Because of these actions, many economists and investors had already suspected that China wouldn't meet Treasury's criteria.

In order for a country to be labeled a currency manipulator by the US Treasury, the treasury determines three criteria: the size of the country's current trade surplus with the US; the size of the country's trade surplus with the rest of the world; and the number of times the country intervened in currency markets in recent months.

The US had earlier listed China, South Korea, Japan, Taiwan, Germany and Switzerland as foreign-exchange manipulators and had kept then on its monitoring list - China by virtue of a massive trade surplus with the United States. "Treasury urges Korea to enhance the flexibility of the exchange rate and will be closely monitoring Korea's currency intervention practices". However, the U.S. Treasury States did not name Taiwan as a currency manipulation nation in the report.

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