The Treasury Department’s semiannual foreign exchange rate report does not name any trading partners as currency manipulators and omits language from the previous report warning that future unfair currency practices could be met with tariffs.
The report finds that for the four quarters through December 2025 no major trading partner met all three criteria under the Trade Facilitation and Trade Enforcement Act of 2015 with respect to its macroeconomic and exchange rate policies: (1) a significant bilateral trade surplus with the U.S. (i.e., at least $15 billion), (2) a material current account surplus (i.e., at least three percent of the country’s gross domestic product), and (3) persistent one-sided intervention in the foreign exchange market (i.e., conducting repeatedly, in at least eight of the last twelve months, net purchases of foreign currency that total at least two percent of the country’s GDP).
Treasury is maintaining China, Germany, Ireland, Japan, Korea, Singapore, Switzerland, Taiwan, Thailand, and Vietnam on its list of countries targeted for close scrutiny of their currency practices and macroeconomic policies. However, Singapore, Switzerland, and Thailand met only one of the above criteria and will be removed from the monitoring list if they meet fewer than two criteria in the next reporting period.
In addition, under the Omnibus Trade and Competitiveness Act of 1988 Treasury has found that no major U.S. trading partner manipulated its exchange rate for purposes of preventing effective balance of payments adjustments and gaining unfair competitive advantage in international trade. At the same time, the report again cites China for its “relative lack of transparency around its exchange rate policies and practices.”
This report omits language from the previous report warning that Treasury would use all available tools to counter unfair currency practices, which could include recommending the use of existing tariff authorities following a currency manipulation determination. One example, Treasury had said, could be to recommend that the Office of the U.S. Trade Representative initiate a Section 301 investigation into the currency practices of a designated economy.
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