Treasury doesn't name any countries as currency manipulators
- Author: Sonia Alvarado Apr 17, 2017,
Apr 17, 2017, 4:40
"While China now meets only one of the three criteria for currency manipulation listed in the report, the text makes clear that China's large bilateral trade surplus with the U.S. is by itself enough to warrant careful scrutiny of China's trade and currency practices", Prasad said.
Trump said during the campaign that he would label China a currency manipulator on day one, leading to fears of a potential trade war.
The report contains an implicit threat that unless China gives U.S. exporters greater market access and further rebalances the economy, the United States could act to rectify the trade imbalance, according to Eswar Prasad, former head of the International Monetary Funds China division. "Treasury urges Korea to enhance the flexibility of the exchange rate and will be closely monitoring Korea's currency intervention practices". The report kept China, Japan, South Korea, Taiwan, Germany and Switzerland on a watch list as they met some of the criteria.
Zhou Shijian, a senior fellow at Tsinghua University's Institute of International Relations, said the Treasury made a "right and realistic decision" not to label China as a currency manipulator, something China had not been branded since 1992. He said he had changed his mind on China.
Presidents have often used these semiannual reports as a diplomatic tool while engaging with countries that are seen as having exchange rate policies that harm U.S.jobs and economic growth.
No major trading partner met the three criteria for enhanced analysis or to be labeled a currency manipulator in the second half of 2016.
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"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", he said.
But in his interview with The Wall Street Journal, Trump said he had decided that China hadn't recently been manipulating its currency after all. Last week, Trump faced strong pushback from the right for green-lighting a USA missile strike on a Syrian air base.
"Unfortunately the President's failure to name China a currency manipulator is symptomatic of a lack of real, tough action on trade against China", Sen.
Before the summit, Trump tweeted that the meeting would be a "very hard one" due to China's large trade deficit and the American jobs it had cost. In a recent interview after meeting China's President Xi Jinping, he said he no longer planned to go ahead with the move.
While China has been criticized for years by other countries for its heavy-handed efforts to keep the yuan undervalued, Beijing has lately been doing the opposite, by trying to prop up its currency. All five of these countries were also on the list in the previous report. The Treasury Department continued to call for reforms to the labor market that would improve Japanese workers' productivity, along with fiscal and monetary support for the Japanese economy.