In the first foreign currency report of the Biden period; Although all the criteria were met, trading partners such as Switzerland, Vietnam and Taiwan were avoided as currency manipulators. Thus, Switzerland and Vietnam were removed from the currency manipulator status. There are 3 criteria for a country to be declared as a currency manipulator: To give at least USD 20 billion trade surplus against the USA, to have a current surplus of at least 2% or more of GDP, foreign exchange interventions…
In these Treasury reports, which has a decisive role in the relations of the USA with China; China continues to be in the close monitoring pot. The US is putting pressure on China over the activities of state-owned banks. The Treasury Department said China's "failure" to be more transparent about operations in state-owned banks requires close monitoring. During the Trump era, the Treasury Department suddenly identified China as the manipulator outside of the normal reporting period in mid-2019, but removed the label five months later to gain concessions in a trade deal. Trump's point on this issue; It was that the weakening of the CNY was "competitive devaluation" and gave China an advantage in foreign trade. The fact that China's currency is centrally controlled by the government and the market mechanism has relatively little influence on pricing underpins this view of the United States.
Countries under close monitoring are China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand and Mexico. Ireland and Mexico were new to the list, with all others included in the December 2020 report. Japan and Germany have been on the list since April 2016, both because of their high trade surplus (versus the US) and their significant current account surplus. Similarly, South Korea meets 2 of the 3 criteria due to the trade surplus that went above the threshold again in 2019. The situation that made Switzerland a manipulator was the SNB's lottery interventions, and there is a similar situation for Taiwan. But the US will refrain from making Taiwan a manipulator, a card that it can play in the commercial struggle with China.
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