None of the major trading partners of the United States — notably China — manipulated its currency last year to take unfair advantage of it, estimates the American Treasury, which however added Taiwan and Vietnam to its list of country under surveillance.
The semi-annual report, released Friday and presented to Congress, focuses on countries with large trade surpluses that intervene in the foreign exchange market to prevent their currencies from appreciating, which would make their exports less competitive.
A total of 12 countries are under surveillance: China, Japan, Korea, Germany, Italy, India, Malaysia, Singapore, Thailand, Taiwan, Vietnam and Mexico, detailed the Treasure.
In this report, the Treasury insists that the Biden administration “strongly opposes attempts by United States trading partners to artificially manipulate monetary values to gain an unfair advantage over American workers”.
Although China had a large bilateral trade surplus with the United States, it did not meet the other two criteria for being accused of manipulation, namely having a large current account surplus and engaging in persistent interventions.
A Treasury official, however, noted the difficulties of properly assessing the situation due to the lack of in-person meetings due to the Covid.
“China’s inability to publish foreign exchange interventions and the broader lack of transparency around key features of its exchange rate mechanism make it an exception among major economies, and the activities of China’s state-owned banks in particular justify close monitoring of the Treasury”, he explains in his report.
The Treasury also said it wanted to continue discussions with Switzerland on its intervention in the foreign exchange markets in order to prevent the Swiss franc from strengthening.
In a statement, the Treasury Secretary stressed that the administration encourages its major trading partners to “carefully calibrate policy tools to support a strong and sustainable global recovery”.
“An uneven global recovery is not a resilient recovery” since it “exacerbates global imbalances”, she argued.