Background

In its semi-annual foreign exchange rate report, the Treasury Department did not name any trading partners as currency manipulators.

As in its previous report, Treasury found that both Vietnam and Taiwan have:

- a significant bilateral trade surplus with the U.S. (i.e., greater than $15 billion);

- a material current account surplus (i.e., at least three percent of the country’s gross domestic product, or a surplus for which there is a current account gap of at least one percentage point); and

- engaged in persistent one-sided intervention in the foreign exchange market (i.e., conducted repeatedly in eight of the last twelve months net purchases of foreign currency that total at least two percent of the country’s GDP).

(Treasury notes that beginning with this report it is incorporating services trade data along with goods trade data. Because the U.S. often runs surpluses in services trade with partner countries, this could lower the number of those that meet the first criterion listed above.)

However, Treasury has found that for the four quarters ending in June 2021 there was insufficient evidence that Vietnam, Taiwan, or any other country manipulated its exchange rate for purposes of preventing effective balance of payments adjustments and gaining unfair competitive advantage in international trade. (Treasury also reached an agreement with Vietnam in July about its currency practices – read more here.)

Treasury is maintaining China, Japan, Korea, Germany, Ireland, Italy, India, Malaysia, Mexico, Singapore, and Thailand on a list of countries targeted for close scrutiny of their currency practices. Switzerland is being added to that list after Treasury determined that it no longer met all three criteria mentioned above.

For more information, please contact Nicole Bivens Collinson (at (202) 730-4956 or via email) or Kristen Smith (at (202) 730-4965 or via email).

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