US to scrutinise trade partners over currency scheme

WASHINGTON: The Trump administration said on Tuesday 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.
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.
“No major US trading partner met the relevant 2015 legislative criteria for enhanced analysis” as a currency manipulator, the department said in a statement.
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.
The report, usually released in April, was delayed this year and 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 per cent of GDP to 2 per cent, suggesting an expanded list of countries surveyed.
In its October 2018 report, Treasury did not label China or any other trading partner as a currency manipulator.
Then, against the backdrop of rising trade tensions with China, it said the yuan’s appreciation would likely exacerbate the US trade deficit but US officials had found Beijing appeared to be doing little to directly intervene in the currency’s value.
China hopes the United States will not conduct unilateral assessments of other countries’ currency rates, China’s foreign ministry spokesman Lu Kang said on Wednesday.
“Whether a country is manipulating its currency is not determined by the United States,” Lu said at a daily media briefing in Beijing.
“Relevant multilateral organisations have long had authoritative assessments of countries exchange rates.” The Chinese government has never taken measures to deliberately devalue its currency, the head of China’s banking regulator said in a state media interview on Monday.
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. — Reuters